What this means for you is that even if you stop paying your second mortgage, the holder of the second mortgage will probably not foreclose. Because, in the event the junior lender forecloses, all the proceeds of the foreclosure sale will go to repaying the senior lender. The junior lender will have gone through the expense of foreclosing but will get no money out of it.
This doesn't mean that the junior lender has no other remedy to recover the money it loaned to you. Even though foreclosure is not an option, the junior lender, being an unsecured lender, can sue you personally to recover the money.
If the junior lender wins the lawsuit and gets a money judgment against you, the junior lender can garnish your wages, freeze your bank accounts, or place liens on other property you may own. Bankruptcy might help reduce or cancel your obligation to repay an unsecured debt. Stopping payment on your mortgage is a drastic step and is one you should take only after considering all other options.
Your credit report will take a big hit, but if avoiding foreclosure and hanging on to your home is your top priority, it could be the right option for you. If you're behind on your second mortgage payments and have questions about what's likely to happen in your specific situation, consider talking to a local foreclosure lawyer.
The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site. The attorney listings on this site are paid attorney advertising.
In some states, the information on this website may be considered a lawyer referral service. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state. I opened the page.
Hi I wanted to do the second course after I filled and I applied for the fee waiver There are many types of liens. Liens describe any legal claim to property. Liens can be placed on property for various financial obligations, not just mortgages. Unpaid property taxes and homeowner association dues, for example, may result in liens being placed on a home. A homeowner who has two or more mortgages has at least two liens placed on the property.
The first a first mortgage is the loan used to buy the home and the second a second mortgage is usually a home equity line of credit HELOC. So, you can withdraw money up to a maximum as you would with any bank account. Two terms to know when it comes to equity:. So, the first recorded mortgage has priority over the second. Some debts like unpaid property taxes even take priority over first mortgages. This means that in a foreclosure sale, the IRS gets paid first.
Holding a priority lien over a junior one makes the second mortgage lender:. More equity increases the likelihood that the second mortgage lender will be able to recoup something from the foreclosure process. If your mortgage is underwater, the senior lender reaps all the benefits. This gives the second mortgage priority over your ability to take advantage of your interest in the property. To avoid giving priority to the second mortgage holder in an event to prevent foreclosure, the first mortgage holder will likely ask the second mortgage holder to subordinate its loan to the newer one.
That way, the first lender skips ahead of the second and keeps its priority in line. Changes that require subordination include:. They lose their security interest in the real estate and become unsecured creditors.
How and when they can personally sue depends on state law. They must first serve you with a summons to appear in court. These methods are discussed below. If a borrower defaults, the second mortgage holder may choose to foreclose depending on:. What sale price they may be able to get for the home at auction to pay off the balance of the loan.
If the second lender wins a money judgment against you, it can collect by:. You should answer the summons and appear in court.
But before court, you can also:. Try to settle the debt for less than what you owe by agreeing to a one-time, lump-sum payment. Request a short sale if both the first and second lien holders agree to this plan of action. Second mortgage holders are unlikely to get much from foreclosure of an underwater home with no equity.
That gives you some bargaining power. A foreclosure attorney can give you more legal advice about these options. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state. Grow Your Legal Practice. Meet the Editors. If you fall behind on your second-mortgage payments, the lender might or might not foreclose, depending on the home's value.
What Is Lien Priority? The Mortgage's Recording Date Usually Determines Priority Generally, priority is determined by the date the mortgage or other lien is recorded in the county land records. What Happens to Homes With Equity If you have equity in your home the home's value is greater than the amount you owe on your first mortgage , your second mortgage is at least partially secured. What Happens to Underwater Homes If your home is underwater your home's value is less than the amount you owe on your first mortgage , your second mortgage is effectively unsecured.
Getting Help If you're facing a foreclosure and have multiple liens on your property, consider talking to a foreclosure attorney to find out what will happen to those liens and learn about various options in your particular circumstances.
Talk to a Lawyer Start here to find foreclosure lawyers near you. Practice Area Please select Zip Code. How it Works Briefly tell us about your case Provide your contact information Choose attorneys to contact you. Foreclosure Laws. Foreclosure: The Basics. Foreclosure and Bankruptcy. State Foreclosure Laws. Alternatives to Foreclosure.
Fighting Foreclosure in Court. Foreclosure Lawyers and Other Help. Chapter 13 Bankruptcy. Credit Repair.
0コメント