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2nd Mortgage Foreclosure

Discussion in 'Foreclosure, Repossession, Auctions, Short Sales' started by fogorich, May 10, 2011.

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  1. fogorich

    fogorich Law Topic Starter New Member

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    If you are in default of your 2nd mortgage and current on your 1st can they foreclose on your home and take it from you.
     
  2. army judge

    army judge Super Moderator

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    Probably not, OP.

    If they were allowed to do so, the rights of the first mortgagor would be ignored.

    They can probably, at most, put a lien on your home.

    They could also obtain a judgment against you.

    I suggest you communicate with them and try to work something out.

    One last thing, my above answers were predicated on your 2nd being on the "up & up".

    If there are some inconstancies or discrepancies, all bets are off, if you get my drift.
     
  3. despritfreya

    despritfreya Active Member

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    A junior lien holder can foreclose if you do not remain current. When it does it takes the property subject to the senior lien holder and, unless the foreclosure sale produces enough proceeds to pay off the senior lien holder, the junior will have to continue to service the loan. As a result, junior lien holders typically choose not to exercise their rights to the collateral unless foreclosing will produce sufficient funds to pay the senior lien holder. Many people who are underwater with their 1st stop paying their 2nd in the hopes that the 2nd will not be stupid enough to exercise its rights. What they forget about is that the 2nd does not have to look to the property. It can simply sue under the promissory note. Or, theoretically, it could wait until the economy is better and then foreclose.

    Des.
     

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