Foreclosure question for a 30/70 mortgage.?
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Just a Guy---sorry to hear of your misfortune
here are the laws...first the way that the foreclosure works is out of your hands. There is a specific set of processes that will take effect.
The 80% or first will foreclose and the second will default. you will not be responsible for the defaulted amount.
The first will send the property to auction and get what it can.
here are 2 tools that can assist you right now:
the first is a website that details the foreclosure process and the timeline for each step. simply click on your state and read
http://www.foreclosures.com/pages/state_...
seonc is a National Forclosure Hotline that has been set up by the feds to assist you. 1-888-995-4673
this number was publicized on CBS Nightline a few nights ago.
good luck :)
No need. The 2nd mortgage lender will likely actually be the one who buys your property at the sheriff's sale. Since the first lender gets 100% of their money first, the only way to reclaim any of your money is to take the property over yourself if you're the 2nd mortgage lender.
Your question isn't that complex. It's real estate finance 101.
If there is adefault on EITHER the first or the second loan, causes the house to fall into foreclosure. The only difference is that the order that the liens appear on title affect who gets paid first.
If the sale of the home does not pay off ALL liens, then whoever is left (which may be your second lienholder) will get a deficiency judgement against you for the balance of the outstanding principle, plus any legal expenses involved.
Continuing to make payments as agreed doesn't get you out of it with the second mortgage holder, because by letting it fall into foreclosure (with your first lienholder), if you read your loan documents, that makes YOU in default on the second, even if your payments were on time and you have a perfect payment history.
Banks are very, very good at covering all the bases.
No, you would not need to pay the second mortgage of 20%. When the 1st mortgage is awarded the property and foreclosure is complete they will settle with the 2nd mortgage lender in order to make the title "clear and warrantable" for resale or auction. Usually when a"deed in lieu of foreclosure" you are signing back both equity and debt. Be sure that in that deed you sign does specify that they will not file a deficit judgement against you. Of course each state has different guidelines if they are a homestead state or a community property state and so forth. Below is a very information website to you more information.
Before you lose your property by forclosure, ask your bank what is "sailors law" and applied, so yu wont lose your property.
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