2nd mortgages on ‘underwater’ homes cannot be voided in bankruptcy
People have been trying to do this and in some cases they got away with it. Bank America challenged this and they won.
So what you have to do is call the 2nd (if the 1st is foreclosing) and try to convince them to take less than what’s owed on the 2nd since they get zero in a foreclosure,
This is not a short sale. You have to explain that you are not buying the property, you want to buy the note. Finding a human who understands this is the toughest part. If you are successful, you have what’s called, “the Right of endangered collateral”. That means you can call the 1st and pay up the arrears to stop the foreclosure. If the homeowner is on board you can then buy the property from him/her. If not, you can start your own foreclosure, You are taking over the proeprty subject to the first with the first lender’s knowledge,
