Posted on: 28th Aug, 2007 05:55 pm
I have a home in floida that has 2 mortgages if i become behind on the 2nd mortgage can the 2nd mortgage forclose on the home
hi patricia,
welcome to mortgagefit discussion board.
it is possible for the second mortgage lender to foreclose but in that situation he will have to pay off the balance on the first mortgage before he will get anything out of the proceeds of the sale.
normally, any second mortgage holder will not go such an option as most of the time there is not much left after the first mortgage balance is paid off.
but you need to check your property's current market value, if it has appreciated by a lot & is more than the total on both mortgages then second mortgage holder might be tempted to foreclose. as then he will know that even after paying off the first mortgage holder he will be able to recover his own dues (though such a thing happens rarely).
do let me know if you have any other questions.
thanks
blue
welcome to mortgagefit discussion board.
it is possible for the second mortgage lender to foreclose but in that situation he will have to pay off the balance on the first mortgage before he will get anything out of the proceeds of the sale.
normally, any second mortgage holder will not go such an option as most of the time there is not much left after the first mortgage balance is paid off.
but you need to check your property's current market value, if it has appreciated by a lot & is more than the total on both mortgages then second mortgage holder might be tempted to foreclose. as then he will know that even after paying off the first mortgage holder he will be able to recover his own dues (though such a thing happens rarely).
do let me know if you have any other questions.
thanks
blue
Few people might ask why the first mortgage will be paid off first and not the second?
The second mortgage will not be paid off first because it is subordinate to the first mortgage. The first mortgage is in the priority position and will have to be paid off first.
This is one of the reasons that most second mortgages have a higher interest rate as compared to first mortgage. There is risk in lending the second mortgage company bears in case the loan goes into default.
Miller
The second mortgage will not be paid off first because it is subordinate to the first mortgage. The first mortgage is in the priority position and will have to be paid off first.
This is one of the reasons that most second mortgages have a higher interest rate as compared to first mortgage. There is risk in lending the second mortgage company bears in case the loan goes into default.
Miller
Hi Patricia,
If you have defaulted on your second mortgage, it is possible for the second mortgage lender to foreclose your house. In that case, he will have to buy out your first mortgage and then proceed with the foreclosure procedure. But for the foreclosure, you must have enough equity in the house.
If you have defaulted on your second mortgage, it is possible for the second mortgage lender to foreclose your house. In that case, he will have to buy out your first mortgage and then proceed with the foreclosure procedure. But for the foreclosure, you must have enough equity in the house.