What happens if cannot pay final balloon payment on 2nd mortgage, but 1st mortgage has been paid on time for years. Refinance is not option as I owe over $350k on the house (1st and 2nd mortage combined) and house is currently worth about $280k
Like the first mortgage, if the second is not paid, the creditor can foreclose. Talk to your mortgage company about options. Also, Chapter 13 bankruptcy may give you the ability to pay that balloon payment over 5 years instead of immediately. Depending on the value of your house and the payoff on the first, it may be possible to remove the second and treat it as unsecured. Talk to a local consumer law attorney immediately before it is too late.
[This communication is intended as general information and not specific legal advice, and this communication does not create an attorney-client relationship.]