What is “lien stripping” of a second mortgage?
A. If have a second mortgage or third mortgage secured by your residence, and there is no longer any value supporting that security interest, then you may be able to have the Court declare that the security interest or lien no longer is attached to the property, and should be treated as an unsecured loan under your Plan. This situation may occur where the value of your home has fallen dramatically since you took out the second mortgage, and, now, the amount owed on the first mortgage is more than the current market value of the home. The lien can be removed from property upon your successful completion of the Plan, and the debt discharged as an unsecured debt at that time.
