2nd mortgage lift the stay question Az pro ze

[powerless]

The second mortgage company has filed a motion to lift the automatic stay because we're behind four months in payments. We objected and a preliminary hearing is set for August. If the second mortgage company is successful -- and the stay is lifted, does the second mortgage company have to give us the 90 day notice for a foreclosure auction or can they take the house immediately? AZ is a nonjudicial state.

I don't think it will come to that. I think that we'll be able to come to an agreement to catch up, but I want to know the worst case scenario.

We filed Chapter 13 because the first mortgage company did have the house in foreclosure. Now I'm not sure if it is or not in foreclosure. The foreclosure was filed 12 months ago. When you looked up the house on zillow it said it was in foreclosure and gave the trustee's name and address. Now as of the end of June, there's nothing.

Our plan has still not been confirmed. We filed pro se in Maricopa County in summer of 2012.

[AngelinaCat]

I am by NO means an expert on mortgages. However, from what I understand through reading here, and our own limited experience with a first and second mortgage, for the second mortgage to be able to foreclose, that company would have to satisfy the FIRST mortgage. Typically, the first is larger than the second. So I don't think this will happen.

It sounds like a bluff to scare you into paying. Since you are in a CH13, are you intending to keep the home?

[powerless]

The first is about 2.5 times the size of the second. Yes, we want to keep the house. There is equity, even on a conservative basis.

[LadyInTheRed]

If the 2nd gets relief from stay, it would then have to go through standard foreclosure procedures.

Regarding the 1st, it is probably still considered to be in foreclosure. Your BK stopped it in it's tracks, but I am pretty sure the bank can continue where it left off if/when it receives relief from stay or your BK is closed or dismissed if you haven't resolved the default. If the second forecloses first, they won't have to bother.

[powerless]

Yes, the bk stopped the auction. It has just been postponed every 6 weeks. When the bk is confirmed it should be cancelled.
I'm just confused. If the first still has the auction scheduled I don't see how the second can foreclose but who knows. This is the disadvantage of being pro se. You just don't know.

[LadyInTheRed]

The second can foreclose. They would have to pay off the first before they receive any proceeds of sale. Since there is equity, it sounds like it may be worth their trouble to foreclose.

ETA: I believe the 2nd can also make the foreclosure sale subject to the first lien. i.e., the buyer purchases the home eventhought the first lien remains.

[powerless]

The preliminary hearing to lift the stay instigated by the second mortgage company is scheduled for a week from Monday. We have heard nothing from the attorney from the second mortgage company, even though we've contacted him twice with a proposal. I thought that the rules in AZ say that we're supposed to try to come to an agreement before the hearing or at least discuss the issues. What should we do, just wait? Contact the attorney one more time?

I also have no idea what happens at the preliminary hearing. I can't go to one before our hearing because there weren't any scheduled the entire month of July.