Compare Mortgage Quotes

Refinance Rates for Today

Please enable JavaScript for the best experience.

In the mean time, check out our refinance rates!

Company Loan Type APR Est. Pmt.

Foreclosure Evaluation

I filed Bankrupty in 2003 and have 2 mortgages. 1st a VA and second is not. The second is going to foreclouse whereas I am unable to make payments for very high energy cost today. Without going into great deal can you advise how a 2nd mortgage evaluates if both loans are more than the house is worth. I realize the 1st has to be paid off by the 2nd and the 2nd cannot come after me for the difference becaue of the bankrupty. But am wondering if I should start packing or relax. It probably would be a blessing if they did foreclose, House is in need of many repairs and I am 71 with bad heart. Thank you in advance for any comments.

Caron's picture
Caron | Joined: July 19, 2005 08:37 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jerry,

You are right, the decision regarding the second mortgage has to be taken by the second mortgage lender. Our Community can only give you suggestions as to what is possible and what can be done so that you benefit from the decision. It's the lender who has to decide.

At your age, it is always good to be free from financial obligations and lead a tension free life. So, I think you are on the right path.

Happy to know that we could give you some relief.

Hope you have an easy life ahead. :)

Caron.

Like | Dislike | Share | Posted: Mon, 07/17/2006 - 20:10 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Chapter 13 in 2003 before the new law went into effect

Like | Dislike | Share | Posted: Mon, 07/17/2006 - 14:48

blue's picture
blue | Joined: October 21, 2005 09:17 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Yes they can't sue you unless they obtain a "relief from stay". What type of bankruptcy did you file, BTW?

Like | Dislike | Share | Posted: Mon, 07/17/2006 - 14:37

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thanks Blue, But I have to correct you.. They cannot sue me or harass me I file Bankrupty in 2003.

Like | Dislike | Share | Posted: Mon, 07/17/2006 - 14:25

blue's picture
blue | Joined: October 21, 2005 09:17 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jerry,

It's just an option I talked about from the point of the lender. In any case they can't approach you now as you have filed bankruptcy. :)

IMO, they will be forced to accept the loss but still they might not write off the debt and can sue you for this in future although I don't know how much they will gain with that.

You may face harassment for sometime. But yes, that's their decision and I too feel you should not put in more stress to your mind at your age. Wish you good health.

Regards,
Blue

Like | Dislike | Share | Posted: Mon, 07/17/2006 - 13:13

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I don't want to do a pre-foreclosure sale. or short pay-off. Remember I filed bankrupty and the mortgager can not contact me about any pre sale or work out any arrangements. But I will say this, I have contacted the 2nd mortgager 3 months ago and they refused to work with me. Which left me no alternative but to allow them to pay off the 1st mortgage and own it or write it off. That will be there decision not mine. At my age and health conditions, it probably would be to my advantage to let them have it. Then I am free of my 1st mortgage obligation and can move into a senior citizen apartment and it surely would make my life easier :)... Again I want to thank everyone who had some input on this. It really didn't give me the answers I wanted, I guess that will be the 2nd mortgager decision, but it sure released some stress. I have to recommend your site for theraputic measures for sure. LOL

Like | Dislike | Share | Posted: Mon, 07/17/2006 - 13:00

blue's picture
blue | Joined: October 21, 2005 09:17 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

In some cases like that, the lender allows the borrower to do a pre-foreclosure sale or short payoff. The lender will accept less than the full amount owed as the sales proceeds do not cover the loan.

Thus the lender is able to avoid the additional costs of foreclosing although he has to accept the loss on the sale.

Like | Dislike | Share | Posted: Mon, 07/17/2006 - 12:33

Caron's picture
Caron | Joined: July 19, 2005 08:37 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jerry,

Yes, I do agree with you. This may not be a wise decision but then lenders often do not write off mortgages. The lender may write off a part of the second mortgage and not the whole. Also, he may not get back the entire $60,000 but then he can retrieve at least $35,000 through the sale. The whole thing actually depends on the second mortgage lender.

Thanks,

Caron.

Like | Dislike | Share | Posted: Mon, 07/17/2006 - 11:45 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Caron I am finally glad you are beginning to understand my original question. Now one for you to think about. What is your thinking about the 2nd morgager paying off the 1st mortgager to take title and then start the foreclosing procedure. The 2nd mortgager would have almost $60,000 invested being $40,000 for the 1st mortgage and $20,000 for the 2nd mortgage, and the property would probably sell in the $35,000 neighborhood. To me that is not a smart decision. I understand what is going on, I was just looking for someones evaluation if a 2nd mortgager would realize this and just write it off.

Like | Dislike | Share | Posted: Mon, 07/17/2006 - 10:23

Caron's picture
Caron | Joined: July 19, 2005 08:37 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jerry,

Welcome back.

I think I can now understand your question. It's all because the second mortgage lender cannot get his money until and unless the property is cleared off the first mortgage.

The first mortgage lender always has the primary rights over the property and hence that is the reason why your second lender would invest to pay off your first mortgage. This will help him to clear the title from the first loan and then carry out the foreclosure for the second loan.

Hope this is clear to you now. Do let us know if there are other queries.

Thanks,

Caron.

Like | Dislike | Share | Posted: Sun, 07/16/2006 - 20:13 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thanks, but now I am getting lost again. The 2nd mortgager can't sell the property at public auction until they pay off the first mortgage which is approx $40,000. So they the 2nd mortgager would have $60,000 invested and if then sold at public auction they would be lucky to get $25,000 just to get rid of it. So with that in mind, why would they pay off the 1st mortgage. This is what I am trying to understand

Like | Dislike | Share | Posted: Sun, 07/16/2006 - 11:30

Caron's picture
Caron | Joined: July 19, 2005 08:37 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

hi jerry,

by completion i mean that the lender will have by then carried out a public auction of your property. he can retrieve the balance amount of the second mortgage from the sale proceeds. so, what you have understood is right; the property will no longer be yours. and, it is the lender who will inform you about the entire proceedings. you should also keep in touch with him in case there is any legal formality that you will have to go through.

if your lender hasn't yet called up, then you should contact him and clarify your doubts regarding the process. the foreclosure laws vary from one state to another. therefore, a foreclosure attorney will be the best person to guide you regarding the process.

hope to hear from you soon.

thanks,

caron.

Like | Dislike | Share | Posted: Sun, 07/16/2006 - 09:25 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Caron: When you say completion, do you mean they own the house then. Also how am I going to get contacted about it. Under the Bankrupty laws they are not allowed to contact me, however, I did receive a letter from an attorney saying something about I have 30 days to dispute the amount of the second mortgage. So far nothing has been said about trying to work out an arrangement. If this was a 1st mortgage I would understand the circle of events but it being a 2nd mortgage it can become hard to follow. Does anyone have any ideas how the process will take place. Like who notifies me of what is going on so I can make my plans on my end.

Like | Dislike | Share | Posted: Sun, 07/16/2006 - 08:47

Caron's picture
Caron | Joined: July 19, 2005 08:37 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jerry,

Generally the lenders in Maine allow for a period of 6 to 7 months for the completion of the foreclosure.

Feel free to ask if you have any other query.

Thanks,

Caron.

Like | Dislike | Share | Posted: Sun, 07/16/2006 - 08:00 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I reside the Maine

Like | Dislike | Share | Posted: Sat, 07/15/2006 - 20:27

Caron's picture
Caron | Joined: July 19, 2005 08:37 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jerry,

Are you talking about the foreclosure period in your state? Can you tell me in which state you reside? Then perhaps I shall be able to help you in a better way.

Thanks,

Caron.

Like | Dislike | Share | Posted: Sat, 07/15/2006 - 20:09 | Post subject:

sara's picture
sara | Joined: July 5, 2006 03:16 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jerry,

I think the time starts from when you first default on the second mortgage. Let me do a little more research and if I find some more information, I shall surely let you know.

Thanks,

Sara.

Like | Dislike | Share | Posted: Sat, 07/15/2006 - 20:03 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thank You Linda. Now I have one more question. I have been doing a little research and find that my state has a 240 day period. Can anyone tell me when the time period starts. examples like: when I was first in default of the 2nd mortgage or when the 1st mortgage is paid off or ??? I also wish to thank everyone for the information they provided. You have been very helpful.

Like | Dislike | Share | Posted: Sat, 07/15/2006 - 16:30

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I understand your question Jerry W. even thought the others appartently don't. Not being in a decision making position I can't answer your question, but can say this I would not invest another $40,000 by paying off the 1st morgage with the uncertainity of time frame for it's return. Good Luck

Like | Dislike | Share | Posted: Sat, 07/15/2006 - 04:23 | Post subject:

Caron's picture
Caron | Joined: July 19, 2005 08:37 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jerry W,

I think the second mortgage lender will allow you to write off the second loan. But this is possible only if he sees that he can get a higher amount from selling the property through foreclosure rather than by getting the balance from you. Since the real estate market at your area is slow, so I believe your lender will gain by selling the property.

Thanks,

Caron.

Like | Dislike | Share | Posted: Fri, 07/14/2006 - 21:54 | Post subject:

sara's picture
sara | Joined: July 5, 2006 03:16 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jerry,

If your second mortgage debt is lower than the property value, then the lender will perhaps want to foreclose it as he will gain from the sale proceeds. Considering your health, it will be difficult for you to carry out any kind of repair work. So, I think it should be foreclosed.

Thanks,

Sara.

Like | Dislike | Share | Posted: Fri, 07/14/2006 - 21:39 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I can't believe my eyes. You say that if they foreclose I am liable for any balances. But the Bankrupty cleared any owed debts and according to my sources if they buy out the 1st and foreclose and sell the home for $1 dollar they have to write off the difference because the bankrupty removed me from any libilities. Chapter 13 year 2003 not 2006. Again I will state my question and put it differently.

I owe you approximately $20,000 which you take out a second mortgage on my home. after the 2nd mortgage is signed seal and delivered a couple of years later I file chapter 13 bankrupty (which then removes me from all obligations to you). I restated my 1st mortgage and make payments on time. you holding the 2nd mortgage refuse to let me restate my contract for whatever reason. Now I stop paying you for the 2nd mortgage for whatever reason.Would you now pay off a 1st mortgage being $40,000 and forclose on a home worth less than $40,000. By you paying off the 1st mortgage you will have an investment of $60,000. So why would you want to pay off the 1st mortgage rather than just writing off the 2nd. What is going to be gained from it all.

Like | Dislike | Share | Posted: Fri, 07/14/2006 - 19:32

blue's picture
blue | Joined: October 21, 2005 09:17 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jerry,

I shall advise you not to worry too much about it. In any case you are unable to meet the payments. Let the second mortgage foreclose.

The second mortgage lender will have to buy out the first mortgage in order to foreclose. So, let them handle it.

Only thing, you might not be freed from the loan even after the foreclosure if the sale proceeds do not cover up the balance owed. Even then when it’s out of hand I suggest to stay relaxed and not to get tensed on it.

Regards,
Blue

Like | Dislike | Share | Posted: Fri, 07/14/2006 - 16:48

colin's picture
colin | Joined: June 30, 2006 02:50 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jerry,

I can understand your difficulty. But I am sorry to say that your mortgage loan would still continue to show up as outstanding.

The lender can sue you and bring a judgment against you. If you have any other home then can manage to place a lien against that.

But you can always discuss the matter with your lender and explain him the whole situation. They may try to find an alternative solution to the problem considering your age and your health.

If you don't have anything left to pay them off they have to sustain that loss. Wish you good health.

Like | Dislike | Share | Posted: Fri, 07/14/2006 - 16:26

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Maybe I didn't explain my question above. I filed bankrupty in 2003 and refirmedrtage and the 2nd wouldn't reafirm so I made payments anyway until February of this year. Now with the energy cost and my health it is almost impossible to maintain the 2 payments. Knowing the 2nd has to pay off the 1st which both equal almost $60,000 and the house is worth less than $40,000. The Real Estate market in my extreme rural area is slow and I expect the house would be on the market for at least 2 or more years. So inyour opinion would you think the 2nd mortgager would realize this and just write it off.

Like | Dislike | Share | Posted: Fri, 07/14/2006 - 15:55

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Jerry,

What type of bankruptcy have you filed or are you planning to file still? See in a Chapter 13 a payment plan would be sorted out so that you can afford.

In a Chapter 7 your house would get sold and the proceeds would be utilized to pay off the debts. If your first mortgage is more than the value from the sale proceeds then it can be satisfied only and the second mortgage holder can't get anything.

Your bankruptcy attorney is the best person to guide you on all your doubts.

Like | Dislike | Share | Posted: Fri, 07/14/2006 - 10:43

colin's picture
colin | Joined: June 30, 2006 02:50 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

hi jerry,

it seems that you wanted the house to foreclose. why did you go for a bankruptcy then? i mean you have to bear the filing costs for it. isn't it?

anyways, a bankruptcy may help you to avoid a foreclosure depending on the type that has been filed by you.

in a chapter 7 perhaps your house will get sold to pay off the mortgage. since you say that you owe on both the mortgages more than your house, so the first mortgage would be paid off as much as possible with the proceeds.

the second mortgage holder would have to sustain the loss. in most cases they charge off under such circumstances.

even if you lose your house, that is going to take some time. so, no need to hurry up. consult your bankruptcy attorney for details.

regards,
colin

Like | Dislike | Share | Posted: Fri, 07/14/2006 - 10:37

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I am currently being helped by a commpany to save our home from foreclosure, how can I be sure that this is not a scam?

Like | Dislike | Share | Posted: Fri, 09/15/2006 - 04:02 | Post subject:

sara's picture
sara | Joined: July 5, 2006 03:16 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

Foreclosure help scams are quite common these days. But you can surely avoid it proided you are able to detect it intially.

You may refer to our discussion on Foreclosure help scam for details on this issue.

Thanks,

Sara.

Like | Dislike | Share | Posted: Fri, 09/15/2006 - 04:15 | Post subject:

Page loaded in 0.357 seconds.