It is not uncommon for individuals to file for a second mortgage. Often times, this happens when their first mortgage is too high and unable to be caught up on. However, with a second mortgage, one process and option that has grown increasingly common is the idea of Strip 2nd Mortgages, dropping off that mortgage during a bankruptcy file. Here are a few things to know about this process that can help you decide if it is the right one for you.
What is Mortgage Stripping?
In terms of bankruptcy, both first and second mortgages are handled the same way. When you strip a mortgage off the property it is currently on, it basically is put in place to show that there is no value in the home. This must be requested by the home owner and generally happens when what is owed on the first mortgage surpasses the actual value of the home.
What is the Process?
The process is usually determined by a court jurisdiction and court of law. First of all, the individual must complete a bankruptcy filing process. At that point, they will be able to complete and file an application that requests the bankruptcy to drop off the second mortgage lien. It could take up to a few months to have this process approved, depending on the situation.
What Are the Benefits?
The benefit of a stripped mortgage allows you to make money back. With a chapter 13 bankruptcy, the unsecured debt is paid a proportional money share which can include personal loans, credit card accounts, medical bills and various other bills. It is a good way to help an individual alleviate some of their mortgage debt and potentially make money back during the process.
It is clear there is a lot to know about Strip 2nd Mortgages and how they can benefit you if you decide to file one. Knowing everything there is to know about this procedure, knowing the process and knowing the benefits can help you make a better decision regarding which process to choose. If you are looking for a way to help eliminate your second mortgage, consider having it stripped today.
