Balloons and RSVP's...

You make no mention as to whether you have properly noticed your borrower. I believe you must send them your Notice of Balloon payment due no less than 90 days and no more than 150 days prior to calling the balance due and starting foreclosure on that breach. If it's owner occ., I'd get the 1137 notice out at least 30 days prior to beginnning your foreclosure, too. I believe regular mail will surfice but I'd shoot them several copies. Yu could send one by Priority Mail/Delivery Confirmation, if you'd like to make more of a splash with the borrower.

That being said, if you can get your NOD started prior to a BK, if they do file after recording, your timeline will not necessarily be interrupted, while you petition for your Relief of Stay, presuming you successfully get it within a reasonable time.

Also, you don't discuss the equity securing your 2nd so, Hopefully, you aren't concerned about "lien stripping" by some BK judge.

Lastly, borrower will likely assert that, because you continued to accept payments beyond the balloon date, you are not entitled to call the loan. This is malarkey, of course, however you may well encounter this argument. In any event, you ought to consider all scenarios and if there might be a good reason to keep the loan going (if your equity is questionable). There is a certain point at which the equity isn't there and the loan becomes a "Lonnie (Scruggs) Deal." I've got one or two of those myself.

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