Subordination of 2nd mortgage

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Icon Mini Profile Debbiegraham44





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Post Posted: Tue Apr 14, 2009 12:58 pm    Post subject: Subordination of 2nd mortgage
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I am in the process of refinancing my first mortgage with the bank that is holding my 2nd mortgage. I was approved for the refinance on the first but am awaiting approval for subordination on the 2nd. Since my house was appraised 20,000 less then it was 5 years ago I am now upside down on my mortgage by 2000.00. I felt that If i refinanced with the same bank that was holding my 2nd mortgage there would not be an issue in regards to the 2nd as long as I was approved for the first, which I was. Due to my equity postion and their "guidelines" it could be refused. I have excellent credit and job history. The title to the house is in my ex-husbands name and my own. Due to his pending bankruptcy it is important that I get this out of his name and into mine ASAP. I guess my questions is, why would they refuse to subordinate a loan they already hold? I have to pay it weather they subordinate or not.
Icon Mini Profile gmakerley
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Post Posted: Tue Apr 14, 2009 1:42 pm    Post subject:
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you are refinancing the first mortgage with the same bank that holds the second mortgage? based on their foolishness, it seems hard to believe that. i agree with your premise that it made sense to do business with them and that there'd be no issue with resubordination.

what's most baffling is that you have an approval for the new first mortgage without any word on the second. do they have dueling loan departments?

in the overall scheme of things, it really makes no difference whatsoever. if they don't resubordinate, then the second mortgage becomes the first mortgage, and the new mortgage sits in second place.

the net effect of all this is the same, and it's too bad there are so many misguided bankers out there. you've got more sense than they do, debbie.

but, of course, i'm sure you knew that already.

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Post Posted: Tue Apr 14, 2009 5:06 pm    Post subject: refinance
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Thanks for the quick reply. Atleast I know I'm not looking at this from the wrong perspective. Not that it helps me any at this point. They must have dueling loan departments. I dealt with the underwriter for the first and she in turn is dealing with a different dept/person for the 2nd. From reading your reply I take it that it is somewhat unusal to have approval of the first without the second. As far as the other sceniro of the 2nd becoming the first...the underwriter did not explain it to me in that manner. I was told that if they did not subordinate the 2nd then they would have to do some"creative banking". Basically finance more on the 1st in order to pay down the 2nd. Now I am dealing with a very large banking institution. Not very impressed at this point.
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Icon Mini Profile sara
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Post Posted: Wed Apr 15, 2009 1:41 am    Post subject:
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Hi Guest,

In your original post, you have mentioned:
Quote:
Due to his pending bankruptcy it is important that I get this out of his name and into mine ASAP.
If he transfers the property to you now, he will not be able to file bankruptcy. He will have to wait for at least a year otherwise the transfer of the property will be considered as a fraudulent one.

Take Care.

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Post Posted: Wed Apr 15, 2009 6:15 am    Post subject:
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If you're dealing with a huge bank then it wouldn't be uncommon for them to have a Home Mortgage division and a Home Equity division, which are essentially 2 business lines within the same company which can both compliment each other or compete for business (as dumb as that may sound). Your first mortgage refi will need to remain in 1st position in order to be sold in the secondary market - that's why they need a subordination.
Icon Mini Profile gmakerley
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Post Posted: Wed Apr 15, 2009 6:24 am    Post subject:
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unfortunately, dueling departments do not compliment each other, nor do they complement each other.

common sense ought to prevail, regardless of the depth of department lines within the institution. as for resubordination, it is correct that if the lender is selling the new mortgage in the secondary market, that it's needed.

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