In 2001, the appeals Court for the Second Circuit issued a decision entitled In
Re: Richard and Lorrie Pond, 252 F.3d 122 (2001), in which the Court afforded a very powerful bankruptcy tool that has resulted in more homeowners being able to keep their homes and avoid foreclosure. The law helps homeowners who find themselves "underwater" on their mortgages, owing more to their lender than their homes are worth. In the past few years many people in Rochester, Buffalo and throughout Western New York financed the purchase of their homes by obtaining a first mortgage for practically the full purchase price. Then, after several years of payments, people obtained home equity lines of credit (not realizing that they are in fact second mortgages), based upon the assumption that the value of the house increased creating equity in their home (i.e. “paper equity”). When the economy slowed down starting in 2007, people maximized their lines of credit and started having trouble making two mortgage payments. Sometimes, people would pay the second mortgage instead of the first mortgage because the monthly payment amount was less. Now, the first mortgage holder wants to “call” the mortgage because you have become behind in payments. If you obtained these types of loans or refinanced your home and took a second mortgage, you may now find yourself in a situation where you are having trouble making payments on two mortgages. I can assist you in determining whether the option of eliminating your second mortgage is available in your case.