- What is 2nd Mortgage Lien Strip?
- Who is eligible for a 2nd mortgage lien strip?
- How does 2nd mortgage lien strip work?
- 2nd Mortgage Lien Strip FAQ
- 2nd Mortgage Lien Stripping Video
- 2nd Mortgage Lien Strip Fees
- Why Wadhwani & Shanfeld for 2nd Mortgage Lien Strip?
What is a 2nd Mortgage Lien Strip?
Many homeowners find themselves in a home that’s unaffordable due to a 2nd mortgage that is not supported by the value of the home. For example, some homeowners either purchased their home at the peak of the market or pulled cash out of their home to make necessary repairs or pay outstanding bills. If your home is upside down and you have a 2nd mortgage or a home equity line of credit (HELOC), then you may be eligible to strip off the 2nd mortgage or HELOC by filing a chapter 13 bankruptcy case. This results in you no longer having to make the required payments on the 2nd mortgage and the lien being extinguished from the title of your home.
Who is eligible for a 2nd mortgage lien strip?
In order to qualify for a 2nd mortgage lien strip, we will need to show that your home is worth less than the amount owed on your 1st mortgage loan. This usually requires an appraisal proving the value of your home along with documents reflecting the payoff on your 1st mortgage loan. Once we meet the first criterion, we will need to show that there is enough income coming in to meet your necessary expenses. This income can be in any form, including wages, self-employment income, pension, social security, alimony/support, rental income and/or assistance from friends and family.
How does 2nd mortgage lien strip work?
Under the current legislation, a 2nd mortgage lien strip can only be accomplished by a chapter 13 bankruptcy. First, we must meet the requirements of Chapter 13. Then, we must be able to provide documentation proving that your home is worth less than the amount owed on your 1st mortgage loan.
Once your case is filed, we file an action against your 2nd mortgage lender and schedule a hearing in front of the judge. This action can either be a motion or a complaint (lawsuit) depending on your judge. We are highly successful at lien stripping because we have handled a tremendous volume of these motions/complaints, and we understand exactly how your mortgage lenders and the Courts will handle these matters.
Once we decide to strip your 2nd mortgage, you no longer make any payments to your 2nd mortgage lender. Although we typically receive the Court order shortly after we file your case, the lien is not officially released from your property until you have successfully completed your plan.
2nd Mortgage Lien Strip FAQ
Q: Can I strip my 2nd mortgage loan through a chapter 7 bankruptcy?
A: No. Chapter 7 does not allow you to strip your 2nd mortgage lien. In a Chapter 7, your underlying liability on the mortgage note is discharged, but the actual lien “rides through” (i.e., survives) the bankruptcy. So, if you want to keep your home, you would have to continue to deal with that 2nd mortgage in some way. In some cases, we are able to negotiate favorable settlement with your 2nd mortgage lender following a Chapter 7 bankruptcy. But, Chapter 13 is the safest way to ensure that the lien will be wiped out.
Q: Do I have to be behind on my mortgage loan in order to qualify for a 2nd mortgage lien strip?
A: No. We routinely file Chapter 13 lien strip cases where our clients are many months behind on their 2nd mortgages. But, of course, you don’t have to be behind in order to take advantage of Chapter 13.
Q: How much does it cost for a 2nd mortgage lien strip?
A: The fees for a chapter 13 case are generally set by the local bankruptcy courts. So, your fee may vary depending on where we file your case. Some attorneys choose to “opt out” of this standard fee set by the bankruptcy courts so they can bill on an hourly basis. In that type of fee arrangement, your fees could end up to be much higher than the standard fee. Our fees conform to the courts guidelines and we generally do not require much money up front to file your case.
2nd Mortgage Lien Stripping Video
2nd Mortgage Lien Strip Fees
The fee for a 2nd mortgage lien strip will first depend on whether your case requires a lien avoidance motion or an adversary proceeding; as the adversary proceeding requires more work, it will cost a little more. Our fees, though, are very competitive. Feel free to call our office to learn more and get a quote for your case.
Why Wadhwani & Shanfeld for 2nd Mortgage Lien Strip?
The attorneys of Wadhwani & Shanfeld have filed over 12,000 bankruptcy cases and have over 40 years of collective experience in bankruptcy. We are not a bankruptcy mill, and we do not hand your case off to paralegals. We are a boutique firm that will provide you with the personal, professional attention you deserve. Our attorneys are well aware of how stressful financial struggles can be, so we make the solution as smooth and comfortable as possible.
We provide a free in-depth consultation to determine whether you qualify for a chapter 13 lien strip case or if such a case is even right for you. If we do think a lien strip is possible, we will provide you with other available options.