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Eliminate 2nd Mortgage With Bankruptcy?

How a Texas Bankruptcy Attorney Can Help

With the current real estate market, the financial economy (even in the great state of Texas,) many people have seen their homes lose a significant amount equity  and even in some cases have seen their homes go underwater on values. Yet, now, the real estate market is finally on an upswing in the great DFW metro area.

One foreclosure attorney dallas has described the situation as a brilliant change of the financial winds in Texas. Many DFW cities have suffered alongside the rest of the country through a series of serious drops and drastic increases in property values throughout the decades. Yet currently, it remains fairly constnat as opposed to those areas across the US. Some homeowners find that they are “underwater” in spite of the relative stability of the Houston housing market. Because of this, their home mortgages put them in a position of owing significantly more than their house is worth to the mortgage lender.

Over these last several years many homeowners throughout Texas have purchased homes using two mortgages: commonly with an 80% 1st mortgage position and 20% going to the second mortgage (the common written designation for this setup is an 80/20). Some mortgage loans in these situations also fall into the category of being an “ARM” or Adjustable Rate Mortgage loan. This means the interest rates adjust higher automatically at a specified point in time or in some cases adjust up or down depending on the interest rate at the time that the mortgage is out of it’s lock period.

For those Homeowners Considering Bankruptcy Who Are Underwater on Mortgage

If values for your house have fallen lower than the mortgage balance on your primary mortgage, some situations allow for elimination of the second mortgage. This depends upon the bankruptcy court jurisdiction, however, as the process of “lien stripping” through bankruptcy is not always an option. Discuss this with your attorney to review your options for your particular home mortgage situation in your bankruptcy.

More information regarding Credit and Bankruptcy here.