If a first mortgage is modified under HAMP, is the second forgiven?
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If a first mortgage is modified under HAMP, is the second forgiven?
Both our first and second mortgage were discharged in a Chapter 7 about 3 years ago. We were paying both mortgages until last year when I became very sick and had to retire resulting in increased medical bills and lower income. We recently applied for a modification for our first mortgage and are awaiting a response. Our second mortgage is double the first. The value of the house is less than both mortgages combined. The complication is that both mortgages were discharged under state law.
Asked on August 2, 2013 under Bankruptcy Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
A modification of one mortgage does not affect any other mortgages or, for that matter, other liens on property. Each one is a separate security interest and contract. If you had mortgages discharged, that generally means that the bank cannot sue you for the balance--but still has a right to foreclose on the property if not paid (which is, presumably, why you were still paying--you didn't want to lovse the home).
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