Foreclusure and junior loans

misc1 · Joined: 08 Apr 2008 Posts: 1 1.34 Dollars($)

I have a primary home with a 1st mortgage and a junior mortgage. Both together are more than what the house is worth. I also have several other house with mortgages. If I decide to sell my primary home. What happens to the 2nd and what happens to any of the other mortgages I have?

larry · Joined: 27 Jun 2007 Posts: 3328 473.51 Dollars($)

Hi,

Welcome to the forum.

If the sale price is lesser than the due amount of mortgage then it will be considered as a short sale. So in that case you should inform the lender about this.

The lender of the second mortgage will not be entitled to anything of the proceeds of the sale until the first mortgage lender is repaid in full. But the lender of the second mortgage can put lien to your other properties.

Feel free to ask if you have any further questions.

Best of luck,
Larry

Niicss · Posted: Wed Apr 09, 2008 4:27 am Post subject:

Welcome,

After the foreclosure sale the first lender have the priority on the sale proceeds. After paying off the first lender, if there is any thing remains it will go to the second lender. But the second lender may place lien on your property as Larry has mentioned.

Let me know if you have any more queries.

evolovik26 · Posted: Wed Apr 09, 2008 6:32 am Post subject:

Both second and 1st lien holder have to agree to short sale. It cant be just one of them. If the first lien holder agrees to short sale they also agree to pay off the second and that might not work for them if the second mortgage is big enough. You need to contact both mortgage companies and work out a short sale if you plannning to sell.

Guest 0.10 Dollars($)

Eugene,

If both the lenders have to agree to short sale then will the deficiency be divided amongst them or does the first lender have higher priority as far as demanding the deficiency is concerned?

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