First – the person who suggested I could just stop paying on the second…. I have been advised that by someone else. I did a loan mod that got my first loan modded successfully, but the bank that holds my second refused to budge. After recently taking a salary reduction at my job, and forwarding THAT documentation to my second, they agreed to drpo the rate on my second from 7.8% to 4% but only for a year. so they offered me what amounts to a $150 drop in monthly payments..
the first agreed to a reduction down to 4.8% permanently.
the bank that holds my second claimed they took no TARP money and don’t have to do any gov’t programs, and that is all they coudl do. I very articulately and politely – explained what you already mentioned – that given the current value of my home, the second mortgage is worthless. they can’t foreclose..and they would effectively get nothing if i stop paying.
I have my car insurance, home owners insurance, life insurance – and banking all trhough this company. USAA. they told me if I stop paying, and go the “discharge” route they will cancel all my policies. i’d have to get car ins, etc somewhere else.. not sure if they can really can my life ins as i have that as a 15 year contract..unless buried in that contract somwhere is a cluase that says they can terminate me for not keeping ohter USAA accounts in good standing…
but I do have the option to just stiff them, quit paying and effectively, they have no recourse. either they will settle with me or they will just sell my note to a collections dept and I will get hounded by them.
i hate to think that I would just walk on my 2nd, but it almost seems like that might be the wisest thing to do. my first + taxes is only $2000, which with my tax writeoff, would mean I’d be living in my house for less than it would cost to rent it…
