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Ellen
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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I filed and was discharged for bankruptcy in May 2008. As

Customer Question

I filed and was discharged for bankruptcy in May 2008. As part of the terms for my bankruptcy, I attempted to reaffirm both of my loans (80/20) for my primary residence. The main mortgage was re-affirmed (it was a 5 yr ARM in its 4th year at the time) and the second loan was variable. Although I attempted to reaffirm both, the courts denied the second mortgage because it was variable. The main mortgage at the time was reaffirmed as fixed, but has now also become variable. Recap: Main mortgage (80%) reaffirmed, but second mortgage not. Both mortgages are with the same bank (Wells Fargo). I've paid on both mortgages without any default. With declines in property values and now my main mortgage being variable, I am wondering if a lien would be placed on my property if I stopped paying the second mortgage? My property is now worth approximately what the main mortgage is. I know I have no personal liability for the second mortgage. I've read various statements about whether or not the second mortgage's creditor forecloses. However I have never heard anyone address when both mortgages are owned by the same creditor. I regret reaffirming this mortgage as it is now rental property and a headache. Had I known initially I wouldn't get credit for a loan I'm paying I wouldn't have reaffirmed either. Now that I know more, I'm actually shocked the court allowed reaffirmation for a 5yr ARM as they didn't for the second mortgage that is variable. I'm wondering what my course of action should be?
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 4 years ago.
*This chat is not intended as legal advice. It is general information that may or may not apply to your situation and should not be relied upon.*

Hello,

Thanks for using JustAnswer. My name is FiveStarLaw and I will do whatever I can to answer your questions!

Don't Forget that the deposit you placed to ask this question is not used to compensate me until you rate my service ! Please Remember that when you are asked to give a rating, you are rating My Service and not this website itself or the law .

Your Question - I am wondering if a lien would be placed on my property if I stopped paying the second mortgage?

My Answer - The 2nd mortgage is a lien on the property.

Explanation - The bankruptcy discharged your personal liability on the 2nd mortgage but did not avoid the lien. Therefore if you stop making payments on the 2nd mortgage, the lender may foreclose.

I would be glad to respond to any related follow-up questions that you may have.
Expert:  Ellen replied 4 years ago.
I am not clear why you rated my service as poor. Was there something else that you wanted to know? As I said initially, I would be glad to respond to any related follow-up questions that you may have.