QUESTION
If we want to do a REFI on our home will we have to add the balance of the 2nd on there or is it considered forgiven?
Asked on Jan 25th, 2013 on Bankruptcy - New Jersey
More details to this question:
Filed BK over 3 years ago, chapter 7. Reinstated our first mortgage with a modification through Wells Fargo, did nothing with the 2nd lien and it was on the BK. If we want to do a REFI on our home will we have to add the balance of the 2nd on there or is it considered forgiven? It is with Wells Fargo as well.
11 ANSWERS
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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I doubt that the second mortgage was forgiven. I'm sure you'd have known if your attorney filed a motion to do so on the basis it was totally unsecured.
Answered on Jan 31st, 2013 at 1:59 PM
Daniel James Wilson
The debt on the 2nd was discharged in the Chapter 7, but the lender still has a lien on the property. It will have to be dealt with somehow in order to refinance. You can negotiate with them for a lump sum settlement or perhaps a reworked loan. You probably should use an attorney to do this.
Answered on Jan 30th, 2013 at 4:33 PM
That will depend on who you go to, to refinance. I am sure Wells Fargo would try very hard to get you to "roll" the second loan into the first. Another lender would probably want to refinance you on what you owe on the first loan.
Answered on Jan 29th, 2013 at 10:47 PM
Your 2nd mortgage lien is still on the title to your property unless it is forgiven or settled. I would suggest that you look into whether you can settle the 2nd mortgage debt with a lump sum payment before refinancing and paying it off at 100%.
Answered on Jan 29th, 2013 at 7:34 PM
You need to talk to a good bankruptcy attorney.
Answered on Jan 28th, 2013 at 11:46 AM
Richard hirsh
Based on the facts you present, the 2nd mortgage would have to be paid because the bankruptcy did not remove the lien. Perhaps because of the loan modification on the first mortgage they might work out an additional deal. but as it stands you would need to pay that off or get Wells Fargo (on the 2nd mortgage) to subordinate to your new 1st mortgage.
Answered on Jan 28th, 2013 at 11:45 AM
Deborah F. Bowinski
While your obligation to pay the second mortgage loan was discharged in your bankruptcy, the lien that they have against the property remains in place and unaffected. In order to refinance you will have to deal with that second loan by either settling it for some lesser puny or by paying it off as a part of the deal.
Answered on Jan 28th, 2013 at 11:45 AM
Chapter 13 Bankruptcy Attorney serving Winston-Salem, NC
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Love and Dillenbeck Law
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The 2nd will have to be taken care of some way. No bank will refiance the loan until the 2nd is included because the lien still exists and would become the priority lien in a refinance situation.
Answered on Jan 28th, 2013 at 11:45 AM
Chapter 7 and Chapter 13 Bankruptcies Attorney serving Dublin, OH
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Granger Law Firm LLC
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The bankruptcy made it impossible for Wells Fargo to collect the second mortgage from you, but did not tremove that lien from your house. You would need to pay the balance of the second mortgage in order to refinance, unless you are able to negotiate with Wells Fargo to accept less than what is owed on the second or release the lien from your property.
Answered on Jan 28th, 2013 at 11:44 AM
Bankruptcy Attorney serving Plantation, FL
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Moffa & Breuer, PLLC
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As to your question: will we have to add the balance of the 2nd on there or is it considered forgiven it is difficult to explain, but I'll try. If you did NOT reaffirm the debt, then YOU have NO PERSONAL liability to the bank for the second mortgage. HOWEVER, the bank does NOT lose its collateral for the loan (the second mortgage) and can look to the PROPERTY for payment, but cannot look to you for any deficiency. I hope this helps.
Answered on Jan 28th, 2013 at 11:43 AM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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Tricky Question: In New Jersey, you are personally discharged from the Second Loan, but the lien remains on the Property, so they could technically foreclose on the 2nd, so they will probably claim you have to roll in.
Answered on Jan 28th, 2013 at 11:42 AM