What is the foreclosure process for a 2nd-mortgage?
Submitted by soldbiz
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- 08/21/2008 - 4:48pm
I hold a 2nd-mortgage on a building that is in default 2 months on its first mortgage and more on my second mortgage. The 2nd mortgage is not yet recorded. Should I send a foreclosure notice BEFORE the 1st holder forecloses? Do I have to send a notice of default first? Does my mortgage need to be recorded BEFORE I can do either of the above? Is it correct that whoever forecloses first controls the sale? Can the first mortgage holder sell the building for whatever they please? Thank you for any help. Please respond to soldbiz@yahoo.com.
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Let me see if I can't simplify this a bit for you. First, you should record your mortgage. You've seriously put your interest in the property at risk by not recording it as soon as the loan was made.
From there, you have essentially 2 ways to protect your loan:
Both option require cash. The second option likely requires significantly more cash as you'll need to have enough money on hand to pay both the first and your second in cash at the sale (although the money that covers your second will be returned).
In either case you should find a law firm that acts as a foreclosure trustee to help you as there may be slight variations on the above based on the wording of your mortgage or deed of trust, and the state you are located in. Best of luck.
You never told us what lead you to a decision like this.
My husband died this year and he willed me a house that still had a lot
of money owed on it his payment the lender has been theathened to send
the loan to foreclosure. What can I do my, husband was a disabled
veteran. Do you have any information to help in this situation?
Death, divorce, disease, denial, drugs (the 5 d's) all play a role in foreclosure. While these things may be looked at as a "hardship" by the lender, there typically aren't any special rights for folks in these situations.
Bottom line, you'll have to pay the loan current, get it sold before foreclosure (short sale?) or let it foreclose.
The second option likely requires significantly more cash as you'll
need to have enough money on hand to pay both the first and your second
in cash at the sale (although the money that covers your second will be
returned
protect your position by showing up to the auction and bidding up the
property sufficiently to cover your loan. After the sale the trustee
(or court) will repay debts in order of priority
Is it correct that whoever forecloses first controls the sale? Can the first mortgage holder sell the building. Regards,
i would definitely send the foreclosure notice. You will have to fight the 1st lien holder on the money.
Interesting input but I also found some really nice mortgage tricks at 10bomb.com so you might want to check it out.
Gretta
Hello First Mortgage is never late and current, second is 4 months behind, we can pay just not every month, can the owner of the second mortgage forclose,
My first mortgage interest is 61/4 the second is about 3 times as high they will not negotiate
What if I stop paying altogether untill the first is paid off
Hi Joseph,
The lender on the second can foreclose on the property. Many seconds do not foreclose because there is no equity in the property beyond the first. Do not bank on the fact that the lender on the second will not foreclose.
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