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Tina
Tina, Lawyer
Category: Real Estate Law
Satisfied Customers: 33167
Experience:  17 years of legal experience including real estate law.
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WHAT RECOURSE DOES THE 2ND. HAVE WHEN THE 1ST. IS UNDER THE

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WHAT RECOURSE DOES THE 2ND. HAVE WHEN THE 1ST. IS UNDER THE WATER, I WANT TO KEEP MY HOME, BUT WHIPE OUT MY 2ND. CAN,T DO A MODIFICATION DID BEFORE, WHATS MY OPTIONS? TERRY

Hello and welcome.

My name is XXXXX XXXXX my goal is to provide you with excellent service today. I am sorry to hear of your difficult situation. Before I can give you an accurate answer to your question, please provide the following additional information:

Is your second mortgage and equity line of credit or were the proceeds used to purchase the property? Is the second mortgage in default?

I look forward to assisting you as soon as I have received this information. Thank you.

Customer: replied 4 years ago.


I BUILT THE HOME THE 2ND. WAS USED TO XXXXX ITS NOT IN DEFAULT i,.owe 2 payements

Hello again, Terry, and thank you for the additional information.

This sounds as though the second mortgage is an equity line of credit since you received the funds (they were not directly paid to a seller) and then used the proceeds from the loan to finish/improve your property.

In that case, the second lender would normally be subordinate to the first mortgage holder and they would have little incentive to foreclose since any proceeds from the sale of the property would normally be paid to the first mortgage holder, leaving the second mortgage holder with nothing.

Therefore, they may be willing to negotiate a settlement and release with you for a fraction of what you owe, if they are made aware that your first mortgage is under water.

If not, I would not typically expect them to pursue foreclosure. In any case, if you did file for bankruptcy protection and did not reaffirm the second mortgage (but did reaffirm the first) and the holder of the second mortgage did not foreclose, then the second would normally be discharged in bankruptcy and you would owe nothing further. That is potentially the most attractive option, but it does put the biggest dent in your credit rating.

I hope this helps clarify the situation for you. Please remember to rate my service once you have all the information you need. If you have any other questions, please ask me – I’ll be happy to respond. Thank you!

Tina

Customer: replied 4 years ago.


so should i start the neg. with the lender or just wait for them, and if neg. are not satisfactory then start proceding with a bankrupcy att.?

Hello again, Terry. My sincere apologies for the delay. I was called away from the site for a bit.

If you are willing to pay something to be release from the balance of the loan, then when the loan is in default, the lender may be willing to negotiate with them. If an agreement is not reached and they pursue foreclosure and indicate they are seeking a deficiency judgment against you, then bankruptcy would typically be the best alternative.

If they do nothing, then you may wish to avoid bankruptcy and wait them out.

I hope that further clarifies the situation for you.
Tina and 2 other Real Estate Law Specialists are ready to help you

Thank you for your positive rating of my service. It has been my pleasure to assist you and I hope you will ask for me should a future legal need arise.

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Thanks again and all the best to you.

Tina

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