Legal Question in Bankruptcy in Ohio

Re: 2nd Mortgage

Hello, and thank you for contacting the LawGuru! There are several parts to your question. First, whether to enter into a reaffirmation agreement is up to the creditor; if they do not want to enter into a reaffirmation agreement, the law does not require that they do so. Second, the second mortgage holder may be able to foreclose in the absence of a reaffirmation agreement, however, it would depend on the language in your particular second mortgage and note. We would need to examine your note and mortgage to see if they have the right to foreclose in this situation.

Finally, even if the second mortgage holder has the legal right to foreclose, they probably will not do so as long as you make the payments. The mortgage holder would rather have your money than your house.

Furthermore, since they are the second mortgage holder, if they were to start a foreclosure action, most of the money would go to pay off the first mortgage holder and the second mortgage holder may go through the trouble and expense of foreclosure and end up with no money.

If you do not sign a reaffirmation agreement with the second mortgage holder, the debt will be discharged and they cannot come after you personally to collect the debt. However, the lien will remain on your house and they retain the right to be paid off if you sell or refinance the house.

I hope this information is helpful. Thank you for contacting the LawGuru.