Posted on: 28th Dec, 2008 05:21 pm
I am about to lose my home. I have a 2nd mortgage. They (2nd) tell me that I have to continue paying my 2nd mortgage even though I am losing my home and unable to pay my first mortgage.
If it's all connected to my home how can I pay one and not the other? I am hoping that my 1st Mortgage will be able to help me keep my home but it doesn't look promising. If I walk away from my home do I still need to pay the 2nd?
This is all very confusing for me.
If it's all connected to my home how can I pay one and not the other? I am hoping that my 1st Mortgage will be able to help me keep my home but it doesn't look promising. If I walk away from my home do I still need to pay the 2nd?
This is all very confusing for me.
Hi etejana!
Welcome to forums!
You have mentioned that you are going to lose the property. Are you facing a foreclosure? Or is the property is being listed for a short sale?
Whether the property is short sold or foreclosed upon, there are chances that the first lender will be able to recover his dues. But as you have a second mortgage on the property, the second lender will also want you to pay back his dues. So the second lender told you to continue paying the dues.
If the property is sold off by the 1st lender to recover the dues, there are chances that the 2nd lender may even charge off the loan. Charge off means that the lender will sell off the loan to a collection agency who will in turn collect the dues from you.
As far as walking away from the property is concerned, I think you will have to pay off the 2nd mortgage dues or else the lender may place liens on your other properties or can even try to garnish your wages.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
You have mentioned that you are going to lose the property. Are you facing a foreclosure? Or is the property is being listed for a short sale?
Whether the property is short sold or foreclosed upon, there are chances that the first lender will be able to recover his dues. But as you have a second mortgage on the property, the second lender will also want you to pay back his dues. So the second lender told you to continue paying the dues.
If the property is sold off by the 1st lender to recover the dues, there are chances that the 2nd lender may even charge off the loan. Charge off means that the lender will sell off the loan to a collection agency who will in turn collect the dues from you.
As far as walking away from the property is concerned, I think you will have to pay off the 2nd mortgage dues or else the lender may place liens on your other properties or can even try to garnish your wages.
Feel free to ask if you have further queries.
Sussane
hi sussane, i am facing a forclosure and i did speak to my 2nd mortgage co and they were willing to work with me and willing to cut my payment in half. i can work with that. my 1st mortgage co is not willing to work with me. i have been sent from dept to dept and have been disconnected so many times that it is almost impossible to get in touch with a human. everything is automated. when i finally did get someone they told me that i had to fax a letter of hardship and i did but i have not heard back from them. i have never missed a payment but what i understood from them was that i would have to be 3-4 payments behind in order for them to help me. that does not make sense to me. i don't wish to get to that point but they are going to raise my payment by $200 and i cannot make that payment, not with a second mortgage. i did the most stupidest thing by getting my home refinanced (arm). but i was not properly informed and at the time i was in desperate need of money.
Hi etejana,
Welcome back.
I understand your situation very well. The first mortgage company is justified in asking for a hardship letter. By the way, did you explain your situation properly through the letter?
The usual practice is, if you don't get behind for 3-4 months, it's almost impossible to get a loan workout plan. Lenders simply want to make sure that you are in no position to continue with the payment plan offered. That's the reason they don't offer a workout plan until and unless a borrower fails to pay for 3-4 months at a stretch.
Why is the first mortgage company raising your payments? have they offered you a loan modification plan? Such plans, at times, do increase your payment instead of reducing it. Or perhaps they're doing it simply because you're on default and they want you to pay off the dues.
It's good that the second mortgage company is willing to reduce payments to half. Well, even if you lose the home due to the first mortgage, you still have to pay off the second. When you lose the collateral, the second mortgage becomes an unsecured loan. It doesn't simply go away.
If you simply walk away from the home, it doesn't make sense. I mean either you give up the home by deed in lieu or try selling it at the usual price. If the housing market in your area is too bad, then try for a short sale provided you don't wish to keep the home and your lender doesn't want to negotiate an alternative plan.
Regards,
Jessica
Welcome back.
I understand your situation very well. The first mortgage company is justified in asking for a hardship letter. By the way, did you explain your situation properly through the letter?
The usual practice is, if you don't get behind for 3-4 months, it's almost impossible to get a loan workout plan. Lenders simply want to make sure that you are in no position to continue with the payment plan offered. That's the reason they don't offer a workout plan until and unless a borrower fails to pay for 3-4 months at a stretch.
Why is the first mortgage company raising your payments? have they offered you a loan modification plan? Such plans, at times, do increase your payment instead of reducing it. Or perhaps they're doing it simply because you're on default and they want you to pay off the dues.
It's good that the second mortgage company is willing to reduce payments to half. Well, even if you lose the home due to the first mortgage, you still have to pay off the second. When you lose the collateral, the second mortgage becomes an unsecured loan. It doesn't simply go away.
If you simply walk away from the home, it doesn't make sense. I mean either you give up the home by deed in lieu or try selling it at the usual price. If the housing market in your area is too bad, then try for a short sale provided you don't wish to keep the home and your lender doesn't want to negotiate an alternative plan.
Regards,
Jessica
Jessica, Will this "deed in Lieu" help me? I have no equity in my property anymore. When all of the problems with the economy and the price of my home went down I started losing my equity. I have nothing. I owe more than what my house is worth. I asked for a Modification Plan but was told that I did not qualify. They then sent me to HOPE and they asked for the letter of Hardship. But was told that I would probably not qualify since I was up with my payments. I am not on default with my 1st Mortgage. I am OK with my 2nd mortgage, I can work with them but at this point I don't know if I want this house anymore. But, I want to be able to get into an apartment and I understand that if I lose my home that no one will rent me an apartment. What are my chances in speaking to a Real Estate Agent about selling my home? I have no way of fixing it and would have to sell as is and would not get a good price for it. They would not get anything out of it. Would they be able to help me? I'm almost afraid to ask them for help.
ER
ER
hey etejana,
Normally lenders do not agree on a deed in lieu or a loan modification if you are current on your payments. I guess that is the reason why the lender said you do not qualify for a loan modification. You can definitely speak to a real estate agent and list the property in the market. But you should note that as you sell off the property, your mortgage will become due and you will have to pay it off immediately.
Normally lenders do not agree on a deed in lieu or a loan modification if you are current on your payments. I guess that is the reason why the lender said you do not qualify for a loan modification. You can definitely speak to a real estate agent and list the property in the market. But you should note that as you sell off the property, your mortgage will become due and you will have to pay it off immediately.
I guess I know what I have to do now.
I did a loan mod on my 1st mortgage but my lender wasn't willing to do anything with my second with me losing my job and my husband pay being less then what it was we can only afford our first mortgage. How can we get help with our second mortgage?? Is there any way the second can foreclose it is the same company
I called my 2nd Mortgage and they were more than willing to help me. Unfortunatley they can't do anything about the first but what they did for me is that they cut my bill with them in half for now and will check again in 6 mos to see how I am doing. If at that time I am doing better they can change it back to the original amount.
Not the best way but I was willing to accept it for now until I find out what I am going to do with my first Mortgage.
No matter what I am responsible for the 2nd mortgage whether I walk away from the 1st Mortgage or not. That is one bill that will not disappear.
Not the best way but I was willing to accept it for now until I find out what I am going to do with my first Mortgage.
No matter what I am responsible for the 2nd mortgage whether I walk away from the 1st Mortgage or not. That is one bill that will not disappear.
welcome,
to just bein me,
you will have to negotiate with the second lender and try to convince him either to forgive the loan or to reduce the payments. you can even contact a loss mitigation expert to deal with the second mortgage lender.
to etejana,
i think the second mortgage lender has given you a good option for the time being. as far as the first lender is concerned, do negotiate with him and check if he can reduce or payments or not.
to just bein me,
you will have to negotiate with the second lender and try to convince him either to forgive the loan or to reduce the payments. you can even contact a loss mitigation expert to deal with the second mortgage lender.
to etejana,
i think the second mortgage lender has given you a good option for the time being. as far as the first lender is concerned, do negotiate with him and check if he can reduce or payments or not.
Can I have a deficiency judgment against me in WA for a first and second mortgage? (first mortgage is a refi)
Second mortgage lender is telling me that after 60 days delinquency the loan becomes a demand loan and they won't negotiate either a loan mod or a short sale. Does this sound fishy to you? Perhaps they just don't want to have to record the loan as nonperforming?? I don't want to mess up my chances for negotiating (if that is true), but I would have to borrow to catch up the 2 late pymts.
Second mortgage lender is telling me that after 60 days delinquency the loan becomes a demand loan and they won't negotiate either a loan mod or a short sale. Does this sound fishy to you? Perhaps they just don't want to have to record the loan as nonperforming?? I don't want to mess up my chances for negotiating (if that is true), but I would have to borrow to catch up the 2 late pymts.
Hi,
The lender can come after you for the deficiency and get a deficiency judgment against you if you fail to pay off the difference. Some states do have anti-deficiency laws. But they are applicable only to purchase mortgages. Since you have refinanced your first mortgage, you cannot claim protection under the anti-deficiency laws.
There's no such uniform rule that states lenders cannot negotiate a modification or a short sale, if the loan is delinquent for 2 months. In fact, some borrowers deliberately get behind on their mortgage payments to prove financial hardship in order to qualify for a modification or deed in lieu. However, much depends on what terms and condition your second mortgage note includes.
The lender can come after you for the deficiency and get a deficiency judgment against you if you fail to pay off the difference. Some states do have anti-deficiency laws. But they are applicable only to purchase mortgages. Since you have refinanced your first mortgage, you cannot claim protection under the anti-deficiency laws.
There's no such uniform rule that states lenders cannot negotiate a modification or a short sale, if the loan is delinquent for 2 months. In fact, some borrowers deliberately get behind on their mortgage payments to prove financial hardship in order to qualify for a modification or deed in lieu. However, much depends on what terms and condition your second mortgage note includes.
I walked away from my mortgage in Arizona. It's been foreclosed on and the bank has it listed with a Real Estate company. The lender (1st) hasn't bothered us at all.
However; the people holding the 2nd constantly call leaving messages. I was told by an attorney that the 2nd people are only allowed to go after the colateral used for the loan. In this case that would be the house.
Whats your take?
Ben
However; the people holding the 2nd constantly call leaving messages. I was told by an attorney that the 2nd people are only allowed to go after the colateral used for the loan. In this case that would be the house.
Whats your take?
Ben
Hi Bennaz,
The second mortgage is a secured loan and the lender can come after the collateral i.e. your home. But, do you expect the property to sell for enough money to pay off both the first and the second mortgage? If the proceeds from the sale of the home do not pay off the second mortgage in full, the lender can come after your wages, ban accounts and other properties.
The second mortgage is a secured loan and the lender can come after the collateral i.e. your home. But, do you expect the property to sell for enough money to pay off both the first and the second mortgage? If the proceeds from the sale of the home do not pay off the second mortgage in full, the lender can come after your wages, ban accounts and other properties.
Over two years ago I claimed bankruptcy and included both my 1st and 2nd mortgage. I have now worked out a principal reduction on my 1st and have modified. My mortgage principal is slighlty above the home's value. Is there anyway to make the 2nd mortgage company write off the debt, since it was in bankruptcy and there is no extra equity?
Hi JoanneF,
If you haven't reaffirmed the second loan, then it will be considered as discharged and you will not be liable for paying it off.
If you haven't reaffirmed the second loan, then it will be considered as discharged and you will not be liable for paying it off.