1st and 2nd mortages foreclosures

[maxwell18]

Can a 2nd try to foreclose before the 1st if you quit paying both at the same time. The house is underwater on the first.
thanks

[logansdad]

they can do anything they want, I just got a foreclosure notice and i am current. Because I told them I wasn't reaffirming.

[maxwell18]

I just was wondering what the legal answer was?

[bulletproof77]

Usually, no. Because most 2nds are "behind" the 1st (I forget the legal term) and there is no incentive for them to foreclose as the 1st would automatically get any profit from the sale. The second is just that-"second"...The lien from the second remains on the home and is only wiped out by foreclosure from the holder of the first note. I BK'd my second (Chapter 7), wiped out my debt to them but the lien remains and will be lifted when Skank of America forecloses on the first..

[onthebrink]

I received a NOD and Notice of Intent to Foreclose today from SLS with whom we have a HELOC. We are underwater on the first, so I'm not clear if they will actually carry through with this threat.

I have read some posts on this forum and others that indicate that they don't have a leg to stand on. I have also read that they can in fact force a foreclosure. I have contacted an attorney that specializes in BK, Debt Settlement, and Foreclosure and sent him a copy of the letter. I also sent it the company we're working with that is working on our loan modification. I called him and he told me not to worry about it because since we are so far under water, they would have nothing to gain.

I am looking for as much info as I can get, so any advice would be greatly appreciated!

[shark66]

From a legal standpoint, the second mortgage issuer CAN foreclose on you, AFAIK. However, the proceeds of a foreclosure sale have to satisfy the first mortgage before they can get a red cent out of it.

In real life (and my modest experience) this only happens when there's a significant equity above the value of the first mortgage. Otherwise, most 2nd mortgage lenders lay low.

Good luck.

[Mensa1]

Yes, legally the 2nd has a valid lien and they can foreclose if the mtg/note is in default. There is no linkage to the value of the property and their ability to foreclose.

If the property is underwater, to the extent that the 2nd would likely get nothing, then it doesn't make logical sense that they would follow thru on such a threat to accelerate the loan. I can surely see why they would send such a letter though, as some ppl even those underwater who wish to keep their homes may negotiate and set up a pymt plan. This action can turn a non-performing loan into one performing, even if on a modified basis. That seems to be their purpose based on info you provided, although I have seen some strange things happen relative to foreclosures. Often times you have a clerk type of person making decisions that may determine whether the lender forecloses or not and sometimes these can be bad decisions. However the net effect to the homeowner is still a huge negative.