If my first mortgage company is foreclosing, what will my second mortgage company do, and what can I do about it?
I’m not sure they can do anything to you that is, but i did hear that you can actually
buy your own home if it’s foreclosure and without having to go to a bank. Might be
in your best interest to do that and then sell it at a profit and move on to another.
In foreclosure on 2nd home, what can my second mortgage company do?
Leave a comment
what they can AND SHOULD do is 1st, sue you for the money that you didn’t pay back. AND, if you don’t pay it back, the IRS WILL tax you as income for the bank’s loss. You will receive a 1099 from the bank.
You can’t just walk away.
IN addition, the depending on the state, the type of loan and the purpose of the 1st trust, they can do the same thing.
References :
Depends on the state where the property is located and the type of second loan
In general in non-recourse state with an 80/20 loan the second lien holder maybe out of luck going after you personally for the amount due
On the other hand if the second is a home equity loan or loan originated in a recourse state you would be liable for the note
References :
If it’s a second home and not your primary residence, you will still be liable for the deficiency (the difference between the amount you owe and what the bank gets for it minus their associated costs and fees). If there is a 1st and a 2nd mortgage on the home and the first lender is foreclosing, the 2nd has the option to make the 1st current and pursue the foreclosure themselves. If there’s no equity, chances are they will not do that their lien will be wiped off the property so that the 1st lender can sell/liquidate it.
Regardless of how that goes down, you will still be liable for the deficiency. Your best bet is to do a short sale and negotiate forgiveness for the first and second. You may also achieve this by asking your lender for a deed in lieu of foreclosure. A local Realtor should be able to help you with this but be sure to find someone experienced in short sales and bank negotiations rather than family or friends.
If it goes through as a standard foreclosure, you will have to pay income tax on the deficiency as if you earned the amount that was lost. The bank will issue a 1099.
These rules do not apply to a primary residence at this time.
References :
They can bring the 1st loan current and do a foreclosure. They would probably do that if there was any equity in the house.
References :
Well they can do a lot! First off, do you owe more then what the house is worth? this can determine a lot of things. Deed in lieu could help you if you had equity in the home. The lender would feel good about selling the home and getting their money back. At times a deed in lieu will be forgiven and will not damage your credit. Now if the lender has to try selling it below the price it is owed and at the current market value which in many cases has happened the lender can sue you for th money still owed or putting a lien on the the first home. If you can still pay your mortgage, but need assistance try going for a loan modification or just filing bankruptcy ( chapter 13).
References :
Well foreclosing the first mortgage will give you some negative aspects of your credit and even the next company will ask you for more documents and may be they charge more as interest rates. So be prepared for it and arrange for more docs as well
References :
http://www.freerateupdate.com/
I’m not sure they can do anything to you that is, but i did hear that you can actually
buy your own home if it’s foreclosure and without having to go to a bank. Might be
in your best interest to do that and then sell it at a profit and move on to another.
References :
http://www.buyhomesforeclosed.net