June 18, 2024


Mad about real estate

Foreclosure Defense- How To Wipe Out Your Junior Mortgages For.

Author : Robert Branson

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Article Link: https://www.mineeds.com/Orlando/Law-Office-of-Robert-Bailey-Branson/Articles/Foreclosure-defense-How-to-wipe-out-your-junior-mortgages-for-fun-and-profit-

Tags: foreclosure defense, lien stripping, bankruptcy, chapter 13

How to wipe out your second and third mortgages for fun and profit in a Chapter 13

Robert Branson

Stripping the secured status of junior mortgages has been a growing preoccupation of mine lately. In a nutshell, you can wipe out your second mortgage on your homestead in Florida if the value of your home is less than the amount owed on the first mortgage.

When to make the decision to file

If you are behind on your mortgage and other debt or are receiving collection calls and letters, you need to take stock of your financial reality. Be honest with yourself- do a budget and if you cannot get out of debt within three years, you should consider your legal options. This includes Chapter 13. This stops collection actions and gives you the opportunity to restructure your debt. So we pay the first mortgage and arrears over up to 60 months, and if the home value is less than what you owe on the first mortgage, the junior mortgages can be stripped of their secured status. (That’s lawyer speak for wiping them out.) Thus, the formerly secured junior mortgages may be treated as if they are just another credit card. You stay in your home, discharge you other dischargable debts, go out, get rich, become prudent and avoid future reliance on credit.

Results of lien stripping

Should you file a Chapter 13 and strip the second mortgage, you wipe it off your homestead property as a lien. This means you could later sell the home for what you owe on the first mortgage, and keep any equity that would build up over time. Protecting your family’s home also preserves the property values of the neighborhood, as foreclosures result in drastic lowering of comparable values. This places you in a favorable position when the market again returns. More importantly, it may be the difference in affording your home with one mortgage versus losing it all in a foreclosure.

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Foreclosure Defense- How To Wipe Out Your Junior Mortgages For…