Posted by Wilton on February 03, 2000 at 10:19:47:
Many thanks for the information. I DID call the trustee again, and it seems that I WILL get the total plus the proper interest. I must have talked with the wrong person before. It is still, however, not crystal clear…I will keep on it…
I agree that a 2nd of this type is often lost completely and I knew this going in…I made the money on the 1st, but wanted to receive as much on the 2nd as possible.
I appreciate everyones response. Im new to this site, and appreciate it more everyday. Wilton
I carried a 2nd. on the sale, now buyer declares Bankrupty - Posted by Wilton
Posted by Wilton on February 02, 2000 at 21:13:22:
6 months ago, I sold a house, got 1st thru lender and I carried a 2nd to make the deal. Buyer now declares bankrupty. I received necessary forms from bankrupty trustee, filled them out and mailed. On the line"total amount of claim at time of case filed" I put in the balance that is owed to me ($1910.00)
The 2nd (originally $2000.00) was at a rate of 12 percent interest. I called the trustee today to make sure that the total money that I will receive will be the 1910 PLUS 12 percent interest. They advised that they would pay interest on the arrears but not on the balance… Can that be…the 2nd calls clearly for 12 percent. Of course I mailed copies of 2nd and other materials… Any thoughts appreciated.
Re: I carried a 2nd. on the sale, now buyer declares Bankrupty - Posted by Warner (Atl)
Posted by Warner (Atl) on February 03, 2000 at 07:28:07:
Wilton,
In many (if not most) Chapter 13 bankruptcy mortgage cases, the trustee will allow your buyer to continue to make the normal mortgage payments (P&I) directly to you AND you should receive regular payments from the trustee as well for the amount in arrears he owes. This assumes the buyer follows the plan and continues making payments to both you and the trustee.
I am surprised that the trustee agreed to pay interest on the arrears. This is paying interest on top of interest already being paid in the mortgage. I believe Congress outlawed this, for mortgages that originated after 199? that subsequently went bankrupt.
I find it unusual that you would not be able to recoup your principal plus interest on your note. Perhaps there was a miscommunciation? if your 2nd lien calls for monthly installments and amortizes that $2K balance down to zero, then you will collect all of your principal and interest due to you.
As for that 2nd lien, Years ago I coined the phrase “throw away” 2nd liens for those much smaller 2nd liens that sit behind a much larger 1st that was originated. The position is tenuous at best.