Wednesday, March 27, 2024

How To Remove A 2nd Mortgage Lien

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Partial Equity Of A Junior Mortgage

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There is one exception to avoiding a 2nd mortgage where there is some small equity. If under the terms of the mortgage the final payment is due within the term of the Chapter 13.

Example: The mortgage on its own terms is due to expire in 4 years and its current balance is $12,000. After deducting all senior liens there is equity of $3,000. A Chapter 13 can be constructed for a term beyond the 4 years to pay the $3,000 in full and the balance of $9,000 to be paid as a general unsecured claim with, hopefully, a small dividend. The term of the Chapter 13 must go beyond the 4 year term of the mortgage.

Home Equity Line Of Credit

You can also take out a home equity line of credit, better known as a HELOC. The amount you can borrow through a HELOC is again based on your homes equity. But a HELOC acts more like a credit card with a maximum credit limit based on this equity amount. Say you have $80,000 of equity. You can take out a HELOC with a borrowing limit of $60,000. You then pay back only what you borrow. You might only borrow $30,000. Youd then have to pay this back, with interest, in monthly installments.

Working With A Modesto Bankruptcy Attorney

Many homeowners in the United States have two mortgages. The first mortgage generally covers the majority of the cost of the home and was taken out initially when the home was purchased. The second mortgage is often smaller, but at a higher interest rate. These necessary loans, although they can help provide favorable credit, can cause a great deal of stress to financially-strapped families.

If you have a second mortgage that you are looking to eliminate, you may have come to the right place. At Scott Mitchell Law Incorporated, our knowledgeable staff has the experience necessary to provide our clients representation they deserve in their time of need. If you are looking to eliminate a mortgage through refinance or bankruptcy, allow a at Scott Mitchell Law Incorporated to help you.

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Working With Scott Mitchell Law Incorporated

Are you ready to move forward with your case? Feeling anxious about what the future may hold? Now is the time to act! The team at Scott Mitchell Law Incorporated has been assisting clients in the Modesto area for nearly a decade in achieving favorable resolutions to their legal cases. If you have questions or concerns regarding your debt situation and how best to go about eliminating debt and second mortgages, contact the firm to schedule a . With the guidance of the team from Scott Mitchell Law Incorporated, you may be able to eliminate debt and high interest mortgages and come out on top of your financial woes. at the firm today to get started.

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The Chapter 13 Bankruptcy Option After A Charge

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If you just ignore the debt from your second mortgage, you will likely get sued by the collection agency before filing. However, you have a few options once your second mortgage, also known as a junior mortgage, has been charged-off. The first option is to simply continue paying your mortgage. However, if you are in this situation then you likely dont have the financial capacity to do so.

Another avenue that could provide relief is filing for Chapter 13 Bankruptcy. Filers should take advantage of certain benefits to convert the junior loan into unsecured debt. This puts the second mortgage in the same category as credit card debt.

In this case, the mortgage could be included in a Chapter 13 repayment plan while you enjoy protection from the lender.

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How To Get Out Of A Second Mortgage

Home equity loans and home equity lines of credit are used by borrowers for a variety of reasons, such as for debt consolidation or home improvements. A home equity loan or HELOC effectuates a second mortgage lien against your property, as well as a second mortgage payment that is due each month. Getting out of a second mortgage will allow you to write one mortgage check each month.

  • 1.

    Request a payoff statement from your second mortgage lender. A payoff statement can give you an idea of the amount that is needed to satisfy your second mortgage lien and will display late fees, as well as prepayment penalties.

  • 2.

    Access funds from your savings or investments to pay off a second mortgage. Use money that you have to satisfy the payoff balance.

  • 3.

    Refinance your primary mortgage to pay off your second mortgage. Contact your primary lender or any bank that will refinance your mortgages to create one mortgage loan.

  • References

    Talk To A Bankruptcy Attorney

    Whether you can use lien stripping in Chapter 7 bankruptcy is a highly debated issue. In addition, the Sinkfielddecision has recently been appealed to the U.S. Supreme Court. If the Supreme Court agrees to hear the appeal, it may reverse the 11th Circuit’s ruling.

    This means that if you live in Alabama, Florida, or Georgia and wish to strip off your junior lien in Chapter 7 bankruptcy, talk to a knowledgeable bankruptcy attorney in your area to learn more about your options.

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    How To Avoid Cure Or Release Tax Liens In Bankruptcy

    Property and income tax liens must be handled differently since they are statutory, nonconsensual, and normally survive bankruptcy. Income tax liens attach to both personal and real property. When you file a bankruptcy and have these liens it is essential to value assets at liquidation value.

    A Chapter 13 must pay secured and priority tax debts in full. If you overvalue the property secured by an IRS lien you unwittingly increase your Chapter 13 payments. IRS secured debts must be repaid in full so if you value your furniture at 7,000 instead of 1,000 you just increased your plan payment 100 dollars.

    Tax liens normally self-release after 10 years. However, there is also a simple form to release an income tax lien. That is right 10 years after the income taxes are due, a federal IRS lien dissolves automatically due to the statute of limitations for tax liens. Often you only have to wait out the tax lien by entering a payment agreement which may not even repay the interest. Look at our page on how to manage or settle income tax debts.

    What You Can Do To Remove A Lien

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    There are generally two ways to get a lien removed from the title of your property. 1. You can contest the lien in court and if you can prove it is not a valid lien, the court will remove it. 2. You can work with the lienholder to settle out of court. Typically, settling out of court will require you to pay all or much of what the lienholder says that you owe them.

    Here is what you or an attorney can do to have a lien removed.

    1. Thoroughly understand the terms of the lien. This includes any and all contracts or agreements supporting the reason why the lienholder placed a lien on your property. You may be able to find some points to negotiate a lower settlement.

    2. Make payment to the lienholder for the amount you both agree is owned.

    3. Draw up a lien release document and have the lienholder sign it giving up their interest in your property.

    4. Have the signed lien release recorded at the local county recorders office to remove the lien from your property.

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    The Benefits Of Having A Qualified Bankruptcy Attorney

    Your mortgage could be the biggest loan youve ever taken on. Your house plays a big role in your familys life, but mortgage payments might leave you in constant fear of losing everything.

    You dont have to navigate this financially challenging process alone. A bankruptcy attorney can show you how to use bankruptcy as a tool instead of viewing it as a failure or a dead-end. Knowing the best way to take advantage of the bankruptcy process and when to take action is something a financial expert can help you determine.

    Your attorney will make sure each document you file is 100% accurate and that the payments expected of you are reasonable for your financial situation. Dont let a bankruptcy court decide these factors for you.

    How Can I Remove A 2nd Mortgage Lien

    Your second mortgage has not gone away, the only way to eliminate it is to pay it off. Your bankruptcy only eliminated your person liability for the mortgage, it did not remove the lien from the house. You need to retain the right kind of attorney to handle this case. Only a WA mortgage foreclosure defense and bankruptcy attorney has the expertise to prevent you from having more problems than you can possibly imagine. To properly answer your questions and address your concerns, the best way to handle this is with an in person consultation. You need to retain the best mortgage foreclosure defense and bankruptcy attorney you can afford. You should not be restricted by geographic factors. Pick the best lawyer you can find and remember one rule: a good lawyer is generally never cheap, and a cheap lawyer is generally never good so don’t choose based on price. You should not be restricted by geographic factors. THIS IS NOT LEGAL ADVICE! YOU NEED TO SPEAK TO AN ATTORNEY WHO IS LICENSED IN YOUR STATE FOR LEGAL ADVICE. This is merely suggestions for you to think about in discussing your situation with the local attorney.

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    What Is A Lien On A Home

    Liens come in many different forms: tax liens, municipal liens, Mechanicâs liens, and mortgage liens. Generally, alien is a security interest in a piece of real property . In situations other than a normal mortgage or HELOC a lien is usually placed on a home if the homeowners have not paid past debt owed. The entity placing the lien on the home is trying to guarantee they will at least get paid before the homeowner can sell the house, or may get paid first in the event the homeowner sells the house and has funds to pay the debt. These types of liens are known as involuntary liens.

    Banks take out a lien automatically when advancing a homebuyer a mortgage. This is referred to as a voluntary lien.It is the bankâs way of securing itself against any issue the homeowner may have with payment in the future and to make sure when the homeowner sells the house the funds are used to pay off the mortgage before anything else. The homeowners are essentially placing their home as collateral in the event they cannot pay their mortgage and giving the bank the right to foreclose on the home.

    What Happens To A Stripped Lien

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    When you successfully strip a lien when filing for Chapter 13 bankruptcy, the lien undergoes the same treatment as other unsecured debts. Unsecured debts, such as debt accumulated from a credit card or medical bills, are discharged when you finish filing for Chapter 13. The lenders of unsecured debts may receive a small amount, or they may receive nothing. Once the lien is discharged, the lender has to remove it from your home, or in the case of a credit card, the lender has to wipe out the debt.

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    How To Get A Second Mortgage Lien To Release

    When you take out a second mortgage, the lender records a lien on the house at the county court house. When you pay off a mortgage, the lender provides the courthouse with a satisfaction of lien. The lien and the satisfaction of lien are records that stay on file permanently. When houses are sold, title companies perform searches on behalf of home buyers to ensure there are no outstanding liens on the home. The Internal Revenue Service places liens on the homes of people who owe back taxes and other U.S. government departments and creditors can also place liens on houses.

    Contact the lender that holds your second mortgage. Ask for a loan payoff with a 30 day per diem. The per diem instructs you how much to add to the payoff amount for every day that passes between the day you receive the quote and the day you pay it off. You can make a loan payoff electronically if you provide the lender with your bank account number and routing number. You can pay off small loan amounts with a credit or debit card. Many banks prefer to receive payoffs in the form of cashiers checks or official checks. You can buy one of these checks at your own bank and mail it to the lender.

    Contact your lender to verify that funds were received for the payoff. Electronic transactions normally process the same day. Check payoffs take up to two weeks to clear. If you have a fixed rate term loan, the lender sends the satisfaction of lien directly to the county court when the funds are received.

    Remove A Lien With Donotpay

    Simple and easy is the best start to getting a lien release form filled out. DoNotPay makes it easier by asking the questions necessary in easy-to-understand language, allowing you to upload documents, and getting your paperwork filled out fast.

    Here is how to start:

  • Search for remove my lien on DoNotPay.
  • Start our Remove My Lien product.
  • Answer some questions about your specific lien and let us help you craft a letter to your creditor to resolve the issue.
  • That’s it! All you need to do is wait for the responses and get your lien released.

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    Removing A Second Mortgage In Bankruptcy

    Are you upside down on your mortgage? Does your mortgage exceed the value of your house? If you have more than one mortgage on your home, filing for Chapter 13 Bankruptcy can allow you to strip or remove your second mortgage.

    Filing for Chapter 13 Bankruptcy can also help you strip other debt such as a home equity loan or line of credit.

    St Mortgage Lien Strip

    Is an unrecorded deed or lien valid on a property?

    The bankruptcy process does not have a mechanism for allowing you to strip off your first position home loan. Your repayment terms on your first position mortgage loan will remain the same when you file bankruptcy. If you want to keep your home, you will have to make your regular monthly payments under the agreed upon contract terms between you and your lender. If you have any missed payments, you will have to also repay your missed payments over time through a Chapter 13 repayment plan.

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    How To Get Out Of My Second Mortgage

    Filing for bankruptcy can eliminate your second mortgage debt. If an appraiser determines the value of your home is less than your first mortgage, or is upside down, Chapter 13 lien stripping may be possible. The bankruptcy court essentially converts your second mortgage into an unsecured debt. When it does, the lender removes its lien from your property. This process only works with junior liens, like those associated with second and third mortgages.

    However, the second mortgage lien cannot be stripped through bankruptcy if its partially secured by equity, and the value of your home exceeds the balance you owe on the first mortgage.

    Stripping a second mortgage with a Chapter 13 bankruptcy requires a court proceeding. The lender may object to stripping your second lien. If so, a hearing will be set by the bankruptcy court, in which the debtor and their creditor can present relevant evidence. The evidence presented may include the fair market value of your home, and that it lacks equity. If the balance of your first mortgage and value of your home are only slightly different, a second appraisal may be ordered.

    Lien stripping usually requires a special motion by the court. The typical scenario is not to strip the lien until the bankruptcy is discharged, but as to when a second mortgage is stripped from your home, the courts dont always agree.

    Review Your Credit Score

    Your lender will study these documents and will also consider several key numbers. Lenders will look at your three-digit to make sure you have a history of paying your bills on time. The higher this score, the more likely you are to earn approval for your refinance request. Lenders consider FICO® Scores of 740 or higher to be excellent ones. Youll need a strong score to nab an interest rate low enough to make refinancing worthwhile.

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    How To Remove A Lien

    This article was co-authored by Clinton M. Sandvick, JD, PhD. Clinton M. Sandvick worked as a civil litigator in California for over 7 years. He received his JD from the University of Wisconsin-Madison in 1998 and his PhD in American History from the University of Oregon in 2013. This article has been viewed 162,389 times.

    A lien is a claim a company or individual makes against your property due to a debt you owe. If you own a home, your lender will place a lien on your property until the home mortgage is paid. Credit card companies, construction contractors, and the Internal Revenue Service can also place liens against your home. When you purchase a car, a lien is placed against the vehicle until you make the final payment. Removing a lien requires you to pay the debt or renegotiate the debt amount. If you dont believe that the lien is legitimate an attorney can help you get a lien removed.

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