We currently have a first and second mortgage. The first Mortgage is with Citi Bank and we owe about 160,000. The second is with America Servicing Company which is a subsidiary of Wells Fargo. We owe 140,000.
The house is probably worth about 300,000 give or take. We are having a problem making the second mortgage payments. I am thinking about just letting the second mortgage go.
What will the second mortgage lender do if I discontinue making the payments?
The balance on the note will increase, you may be sued to recover the debt, but at the very least it will remain as a lien against the property at the inflated future balance.
Electing to stop paying the second mortgage is not a solution, but a way of temporarily postponing the reality of your situation.
Apparently the reality is you are struggling financially and finding it tough to make your house payments. I can only imagine what other obligations you have. This might be the result of declining income or increased expenses. Whatever it is, it is clear your financial life is out of balance here.
That’s the issue we need to deal with, not stopping your second mortgage payments.
So let’s say you stop your second mortgage payments, what possible good can come from that? You’ll increase your stress level and always be waiting for the shoe to drop. It also keeps the lien against the property that will have to be satisfied if you ever need to sell the home.
Instead I urge you to take action and start controlling your future instead of waiting for future actions to control you.
Let’s deal with the overall debt situation and not just bargaining for an alternative outcome. Do not avoid bankruptcy as a serious consideration to helping you wrap up the current mess and start over.
I’d suggest you first read How to Get Out of Debt. The Honest and Unvarnished Truth and The Truth About The Success Rates, Failure Rates and Completion Rates of Credit Counseling, Debt Settlement, and Bankruptcy. They will give you a great overview of what we need to deal with to get you moving in the right direction.
Then use the free How to Get Out of Debt Calculator to review your options.
Once you’ve identified a company you want to work with, then follow my step-by-step guide on what you should look for and expect from a good debt relief company.
Please post your responses and follow-up messages to me on this in the comments section below.
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