Just curious, we are behind on both the first and the second, but I am trying to do a loan mod on the first. First is $510K, second is $150K, house is worth Less than 400K now. Has anyone been in a situation where you owe more on the first than the house is worth, yet had the "second" mortgage holder file for forclosure>?
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There is obviously a risk. A default to any lien holder on your house will trigger a foreclosure right.
In this market, it is hard to say what they will do. However, I have seen a few 2nd mortgages simply get charged off and assigned to collection agencies. (note, that is not an abandonment of the lien).
If you ever go to sell or refinance the house, you will have to deal with the 2nd mortgage at that time. -
When a second mortgager forcloses, they have to assume and pay off the first mortgage. 'HubIf I knew it all, would I be here?? Hang in there = Retained attorney 8-06, Filed 12-28-07, Discharge 8-13-08, Finally CLOSED 11-3-09, 3-31-10 AP Dismissed, Informed by incompetent lawyer of CLOSED status, October 14, 2010.Comment
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Technically, they don't have to assume the note, but the proceeds of sale go to the 1st mortgage holder before the 2nd receives money.Originally posted by AngelinaCatHub View Post
A few years ago, when real estate values were high, it was common for the 2nd mortgage holder to buy out the first (usually at some discount) and then proceed with foreclosure.Comment
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