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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 38129
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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I am in a bankruptcy chapter 13 for a second mortgage and I

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I am in a bankruptcy chapter 13 for a second mortgage and I have fallen behind in my first mortgage. I am in the process of going through a firm that is trying for a modification of my first mortgage to lower my interest rate and add my defencient mortgage amount to my loan so I will be current. My first mortgage has been sold more than twice and I was told by the people who are doing this modification that the loan was sold illegally. They feel I will get this modification. In the meantime I have made every payment to my bankrupcy (17 payments) but because I am behind in my first they filed a motion for relief. I am employed and I just cannot make both of these payments at the interest amount that they are asking. My first is $308,000 and my second is 118,000 which part of it was taken out to pay for first mortgage when interest rates were 14%. The second amount that makes up the second mortgage is an amount they paid my first mortgage for back payments due without informing me so they could foreclose. The first mortgage knows nothing about what the second is doing. How can the second foreclose or sell my house at auction if I have made all their payments and the first mortgage is working on giving me this modification. I cannot pay both payments at these high rates.
What was the property's fair market value as of the date of filing of the Chapter 13 petition?

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Customer: replied 4 years ago.
my house was worth 600,000
If you are current on the 2nd loan, then you are not in default, and if you are not in default, then the 2nd lienholder has no right to foreclose. You can object to the request for relief on grounds that there is no default, thus no grounds to foreclose and no grounds for relief from the bankruptcy stay.

If the lender claims that somehow its interests re at risk, your response is that there is more than enough equity in the property to cover both the first and second liens, so there is no risk to the 2nd lienholder at all.

I'm actually wondering the same thing as you: why does the 2nd lienholder think it has grounds for relief from stay?

Hope this helps.

NOTICE: My goal here is to entertain while educating the public about the law. I hope my answer is useful and informative to you. During our conversation, the website may ask you to rate my answer. If you rate my answer lower than the middle rating, then the website retains your entire payment, and I receive nothing. It is entirely your choice as to how you rate my answer. However, because your payment to me is in the nature of a donation/gift, rather than as compensation for any services rendered, you are entitled to know how your rating affects the final distribution of your donation.

If you need to contact me again, please put my user id at the beginning of your question ("To Socrateaser"), and the system will send me an alert. Please Click the following link for IMPORTANT LEGAL INFORMATION. Thanks and best wishes!

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