Can I get a HARP modification on 1st mortgage of investment property when 2nd mortgage was discharged in bankruptcy?
Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 2,431 contributions
There are a couple of potential issues. First, the second being charged off in the bankruptcy is not an issue. If in fact the bankruptcy court has discharged the debt, their action to hold the release of the lien hostage for any amount is probably illegal. If the debt was discharged, the lien should have been quashed. My guess is that they are hoping you are not smart enough to challenge them on their proposal. I would suggest that you contact the attorney you used when you filed BK and clarify the validity of what they are doing. If they are acting illegally, a lawsuit may be in order. (That would teach them a lesson). As to the rest of it, in order to do a HARP, the property must be HARP eligible. Have you verified that either Fannie or Freddie own the first mortgage? For Fannie Mae (FNMA) use http://www.fanniemae.com/loanlookup/ For Freddie Mac (FHLMC) use https://ww3.freddiemac.com/corporate/. If they do, then you will have to wait for the issue with the second to be resolved. The new loan will need either the second released or subordinated. IF they are trying to extort money for the release, then they won't do the subordination either. My California License is pending, but as soon as it is issued (I've been told 2 weeks or less), I'd be happy to help you. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com 888-889-9950
William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions
never gonna happen... any late payments on any mortgage will prove you to be ineligible.... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com
More details --- I live in AZ and have investment condo in CA. Condo is worth about 230K, and 1st mortgage balance is 232K. 2nd mortgage is 77K. Making it more complicated is that both loans were discharged in bankruptcy in 2008. I don't know if this affects qualification for HARP or not. After the bankrupcy finalized, I negotiated with 1st mortgage lender to keep property. Payments are up to date and not delinquent. 2nd mortgage lender has basically been out of the picture. I have no personal liability since the loan was discharged, but they still have a lien on the property. Can I refinance 1st mortgage thru HARP? 2nd mortgage has offered to release its lien if I pay 15K of the 77K owed, and will deem it paid in full. I just cannot save up this money unless I can refinance the first mortgage lower. Right now I lose about $500/mo on the condo.
Jeremy Redlinger (JeremyR)
#29 ranked lender in Minnesota - 191 contributions
From what I am hearing, your 2nd mortgage has gone into collection status? If that is the case it is going to be very difficult for you to qualify under the HARP 2 program. Many lenders may look at this as a foreclosure and under Fannie and Freddie rules it may be up to 7 years before you can obtain a new loan.I would contact a local mortgage professional and fill out an applications and have your loan ran through either Fannie or Freddie automated underwriting system. if you get an approval, your broker will need to check with their lenders to see if they will accept your loan. The first step is to get your Fannie or Freddie approval.
The 1st mortgage is Fannie May. As for the 2nd mortgage, the loan was discharged in bankruptcy, so it is not in collections, and they cannot make any attempt to collect a debt. I understand from my attorney though that they can hang on to their lien on the property. I initiated the communications with them as to a payoff amount for them to release the lien. They are down to 15K as what they will accept, but I believe they will accept 10% which would be about $7800. Ideally it would be nice to refinance the first and pull out enough to pay off the 2nd and get them to release the lien, but I believe that is not possible with HARP. So alternatively, refinancing the 1st so I can save up enough to pay the 2nd 10% is what I'm going after.
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