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options on getting rid of my second mtg?

My husband & I went through BK (did not file together 2 yrs apart) we did not reaffirm on our 1st or 2nd mtg. We have been paying both on time every month until just recently. we are current on our 1st but we did not pay the second in March or April. Our house value from just 2.5 yrs ago has dropped approx.75k. I contacted the 2nd mtg company 2 days ago to let them know we are having trouble and noticed today that they hit our credit and our scores dropped 75 pts.(the loan was not on our credit report until 2 days ago) we would like to get out of this by either a refi to combine the 2 or to make a buyout offer. the 2nd mtg company said to fill out the docs needed for a mod and within 60 days will find out IF we could get it. Can anyone tell me what our options might be or who/where I can go for info? We are still current on our 1st . my 2nd is a high rate 8.5% with a balloon after 15 yrs. 1st mtg was for 172K (due 169K- 2nd 57k due 56K)  (FYI we are having trouble because of loss of income dut to disability)
  • April 27 2010 - Joliet
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Answers (6)

Couple things.....One, you can refi under this new government plan if you are current in the last 12 months on your primary mortgage. .......Two, I would contact a consultant you can afford, to handle/walk you thru a modification and how the game is played.....Three, I have had success erasing, modifying, and limiting 2nd liens......It's all in the numbers and the game......By the way, DON'T pay $2,000 to a "modification company", especially up front, to help you.....A good consultant will ask for a lot less........Like me! (hint, hint, hint)
  • April 28 2010
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It depends on the lender, but typically, you'll need to prepare a hardship letter (a good hardship letter doesn't complain about property values, it explains why you can't afford the debt anymore), a list of income/expenses, and a written offer for however much you're offering to settle the debt for.

Again, this is not something that is a surefire way to get rid of a second mortgage, but I have negotiated seconds down to a few thousand dollars on several occasions. It's always a good deal, and it doesn't hurt to ask.

Hope you can work something out.
  • April 27 2010
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How do you approach the lender to offer a settlement? I might be able to borrow money from family to get out of this mess.
  • April 27 2010
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Easiest way to get rid of it would be to offer a settlement to the lender, but that a) isn't a sure thing; and b) requires that you have a significant amount of cash available. It's much more likely that you work out a modification or forbearance on the second to lower the payment. If you've missed payments in the last twelve months, it's not likely that you'll qualify for a refinance.
  • April 27 2010
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1st is Indymac 2nd is now serviced by Acqura Loan svc. I ave asked about Refi's and the value is not there compared to loan - not enough equity
  • April 27 2010
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Who is your lender? 

A refi looks like it would be your best offer if you still have enough value in your home to do it. 
  • April 27 2010
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