If you were unable to make at least a 20 percent downpayment on your home, or if you needed extra money after purchasing the home, you may have taken out a second mortgage. Unfortunately, a second mortgage can put quite a strain on your finances. If you are dealing with financial problems because of a second mortgage, the Chicago mortgage lawyers at Robert J. Adams & Associates may be able to help.
Voiding a Second Mortgage
Many people have second mortgages, which are also known as home equity loans, in addition to a primary mortgage. For example, you may have a first mortgage equal to 80 percent of your home's value and a second mortgage equal to 20 percent of your home's value. If you file Chapter 13 bankruptcy, however, we may be able to void your second mortgage.
How it Works
Because of the recession, many homes have fallen in value. In such cases, the combined value of your mortgages may exceed the current fair market value of your home. If you fall into this category, you may qualify to void the mortgage in bankruptcy by filing an adversary complaint. After we file this complaint, the court will determine the value of the property securing the real estate, and the lien may reduced to an unsecured claim. After paying a very small amount and completing the bankruptcy, you can file a judgment with the Recorder of Deeds, and the second mortgage will be voided.
Assume you purchased a home for $300,000 with a first mortgage of $250,000 and a second mortgage of $50,000. If your home is currently valued at $250,000 or less, we may be able to save you as much as $50,000 using this method. This would allow you to eliminate your second mortgage payment altogether, thus reducing your monthly burden. We have used this approach many times in the past, and we have been able to save our clients millions of dollars.
For more information about voiding your second mortgage, contact us at (312) 346-0100.