garnishment on a savings account isn't an automatic thing - a creditor has to go through a process before it has the right to do that. a safe deposit box won't pay you any interest, but that's not much of a loss in comparison with what banks pay anyway, so you could do that. i'd keep your 401k money where it belongs - in the 401k. _________________ George M. Akerley
Loan Consultant
860-221-5044
Floridian In Trouble Guest
Posted: Sun Nov 08, 2009 8:00 am Post subject:
I am located in Florida. We have a 1st ($70K) & a 2nd (176K)mortgage our house is worth about 130K. The 1st mortgage only has my name on it and the 2nd has only my wife's name on it. The house is in my wife's name only. Since my wife took out the 2nd mtg she has lost her job and had 2 children. She has no money in her name and she will probably not work again for another 15-18 years, so there wouldn't be any wages to garnish. I am not able to make the payments on the 2nd any more. If I stop paying the second mtg and they start the forclosure procedures, will the bank holding the 2nd mtg pay off the first mortgage before they can collect their money? If so will anything reflect on my credit report about a foreclosure?
Thanks
If the second lender forecloses the property, then he will have to satisfy the mortgage dues of the first lender. This is because, the second loan is subordinate to the first loan. As the second lender is foreclosing the property, then I guess, your credit will not be affected. It is your wife whose credit would get ruined due to foreclosure. _________________ Procrastination is the enemy of your financial sucess
Deeply Underwater Guest
Posted: Sun Nov 15, 2009 5:44 pm Post subject:
I have a similar situation to many who've posted before. I have a first and second mortgage, and my home's current value is less than the principal on the 1st alone. The 2nd in particular has a ridiculous rate by today's standards, but I obviously can't refinance in this situation and both lenders are unwilling to modify.
Given the amount of negative equity, if I default on the 2nd only I think it's unlikely they would proceed with foreclosure, but I'm curious what other negative consequences I would face. I'm okay with taking a hit on my credit score, but I've seen some mention of garnishment on here. Can the lender garnish my wages, or just bank accounts? How easy and common is this for them to do? Also, do the lenders typically post some public notice of foreclosure or auction, even if they do not proceed all the way through with a sale? My wife's not too crazy with the idea of the neighbors finding out, and I'm guessing an auction sign on our lawn would be a dead give away.
The second mortgage lender can foreclose the property but he will have to pay off the dues of the first mortgage lender. If he does not foreclose the property after your payments are past due, he would simply charge off the loan. Then a collection agency would collect the dues from you. This will definitely lower your credit score. If the lender does not charge off the loan, then he can garnish your wages or your savings account.
As far as foreclosure is concerned, the lender will send you a pre-foreclosure notice.
gmakerley
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