PatColo
11th May 2011, 04:38 AM
Bankrupt SF Bay Area homeowners shed second mortgages (http://www.mercurynews.com/real-estate/ci_18011666?source=patrick.net)
Bankruptcy laws prevent homeowners from eliminating the debt of a first mortgage if they plan to stay in their home. But second mortgages are treated differently. They can be declared unsecured debt when there is no equity to cover them, as is the case for millions of houses that are now worth far less than a few years ago.
When that happens in a personal bankruptcy proceeding, the second mortgage is put on hold and no payments are required while the homeowner completes a repayment plan for other debts -- which typically takes three to five years. At that point, the second mortgage is eliminated.
more: http://www.mercurynews.com/real-estate/ci_18011666
also see:
Strategic Defaulters Be Aware : Lenders Will Go After Borrowers Personally For Unpaid 2nd Mortgages aka Junior Liens (http://www.strategicdefault.org/2010/04/strategic-defaulters-be-aware-lenders.html)
Bankruptcy laws prevent homeowners from eliminating the debt of a first mortgage if they plan to stay in their home. But second mortgages are treated differently. They can be declared unsecured debt when there is no equity to cover them, as is the case for millions of houses that are now worth far less than a few years ago.
When that happens in a personal bankruptcy proceeding, the second mortgage is put on hold and no payments are required while the homeowner completes a repayment plan for other debts -- which typically takes three to five years. At that point, the second mortgage is eliminated.
more: http://www.mercurynews.com/real-estate/ci_18011666
also see:
Strategic Defaulters Be Aware : Lenders Will Go After Borrowers Personally For Unpaid 2nd Mortgages aka Junior Liens (http://www.strategicdefault.org/2010/04/strategic-defaulters-be-aware-lenders.html)