CH 7 & SS
Situation where HO has filed ch 7, but it is only for the 2nd mortgage (which is $9K). The first mortgage ($147K) is FC. FMV of house is $150K. Can someone direct me on how this will effect the first and what documentation Ido I need from BR Lawyer?
I had a HO contact me with a similar situation. I have verified most of the info, but would like some more “Expert” advice. I will have the Property under contract today; and would appreciate any “Expert” feedback/opinions, as relates to the chances of getting the 2nd to drop their claim/lien? Is that doable or is there a general % that 2nd lien holders find acceptable? Should bankruptcy Trustee be contacted prior to offer? Let me know you thoughts “SSPro” 
Also; the HO would like to stay in the Home and lease option or repurchase on land contact. Does this mean that she wouldn’t be obligated to pay rent (if purchased) until her redemption period is up?
So here is how it looks:
• Sheriff’s Sale was in December 2006
• 1st Mortgage: $160,000 (Purchased by US Bank for $160,000)
• 2nd Mortgage: $35,000
• HO has filed Chapter 7 (Before Sale)
• FMV 190,000-195,000
• HO redemption rights until June 2007
I do have a Realtor friend that negotiates SS, but was concerned that he says the 2nd is “automatically” wiped out. My question has been. What happens to their interest?
If the debtor filed chapter 7 and the sheriff sale took place the protection under bankrupty for that property failed. The debtors protection was either discharge, dismissed or abanded by the trustee (court). Most likely the lender was granted a relief of stay and the property was exposed to sale due to a lack of equity.
I have not had much assistance from the Agent, so decided not to try and take this on alone. I am in "SS Training", but not at someone elses expense. If anyone is interested in this deal, let me know. I know the HO and can assist with paperwork etc.