Many homeowners during this economy have lost a great deal of equity in their homes. Milwaukee has seen a drop in property values. Many homeowners now find themselves “underwater” on their mortgages, owing more to their lender that their homes are worth. In the past few years many borrowers purchased their home with two mortgages: 80% first mortgage and a 20% second mortgage. If you obtained this type of loan or refinanced your home and took a second mortgage, you may find yourself having difficulty making your payments. Having a free initial consultation with one of our attorneys can assist you in determining whether the option of eliminating your second mortgage is right for you.
If the value of your home has fallen below the total outstanding balance of your first mortgage, it may be possible to eliminate or “strip off” your second mortgage. If you purchased a home for $300,000. with an 80/20 mortgage, you would have a mortgage of $240,000 and a second mortgage of $60,000. If the value of your home stands at $200,000. due to the economy and changing home values, you may be able to rid yourself of the second mortgage through a Chapter 13 bankruptcy. The amount that you owe on the second mortgage will be paid at the same rate as the rest of your unsecured debts. Eliminating a second mortgage through a Chapter 13 bankruptcy can help people get a fresh start.