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If I stop paying my second mortgage will my first proceed in my loan modification ?

Posted on: 29th Mar, 2010 10:50 am
[font=arial:b502b3f26c]hello. i am very confused and need some advise. i lost my job back in october. i am on unemployment which is $1060 a month. i was earning $4200 a month. i am the only one in my home and have no one to really help me financially. i spoke to my mortgage company when i got laid-off and they put me into loss mitigation. so, i do not have to pay until may. (i have that money for the mortgage company thankfully due to my tax refund and some other money saved.) the bank said otherwise the house will go into immediate foreclosure. this is the only bill i have not paid. i have stayed current on everything else.

i know that my issac score went from an 800+ into the tank already due to loss mitigation, so now i have some decisions to make while my credit is already ruined.

i love my home! i do not want to lose my home! but, it is now almost april. i am almost out of money and still cannot find employment. i really have been trying. i have applied for just under 400 jobs no luck yet, but hoping to get another interview this week.

i have been given advice and i want to know if it is good advice and what the consequences may be since i have never not paid a lender and it makes me sick to think i have to default on someone. i have been told to stop paying my second mortgage and my credit card. (i only have one credit card. my second mortgage, credit card, checking and savings accounts are all the same bank. my first mortgage is wells fargo. my second mortgage is chase bank.) i was told that since there is no equity in my home they cannot foreclose on the property. i was told that they will most likely harass me and try to settle for a less amount or try to sue me. i have no assets, nothing to seize. my car has a loan on it. i am planning on moving my bank accounts this week so that they cannot seize those since they are with that bank like i stated. i spoke to my mortgage company (wells fargo) saturday and they wanted to update my income and bills and information again. i let them know i have the money for may. they said they were going to do a loan modification at that point. i plan on paying wells fargo on the may 2nd. my second mortgage to chase is due on april 15, will my mortgage company still do my loan modification if they find out i am not paying my second? and will someone tell me what is really going to happen to me. i do not want to file bankruptcy!
thank you for any assistance. i know your time is valuable![/font:b502b3f26c]
Hi lldevil,

Though your property does not have any equity, the lender will still be able to foreclose it. If the foreclosure sale of the property is unable to satisfy the loans of both the first and the second mortgage, then you would've to pay off the deficient balance to the lenders.

As far as your loan modification is concerned, you won't be able to qualify for it if you don't have a job.

Take care.
Posted on: 30th Mar, 2010 02:15 am
Posted on: 22nd Jul, 2010 02:12 pm
Posted on: 22nd Jul, 2010 02:14 pm
Also, Wells Fargo and Chase are BOTH participating in HAMP program AND the 2MP program. If your 1st loan qualifies for a loan modification under the HAMP program, then your 2nd loan will ALSO qualify to be modified under the same terms. Most banks are not participating in the 2MP, but Chase and Wells Fargo are.
Posted on: 22nd Jul, 2010 02:19 pm
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