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We hold a 2nd mortgage on a spec home we built and unfortunately we had to foreclose on the buyers. Not only didn't they pay us but they also got behind on the 1st mortgage. The 1st mortgage lender has filed a foreclosure too. We have fixed the house up, listed the house with a realtor and kept things looking nice. My question is: Does the mortgage company that holds the first have the right to make us pay for the previous owners accumulated interest, back taxes and realtor fees just to sell the house?

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome kdhein,

the foreclosure that you filed will have less priority than what the first mortgage filed. Moreover, I haven't heard of 2 foreclosures on the same property. I find that you have done the repair work so that the house can be sold off at a suitable price. But you can't do it until and unless the first lender gets his share of loan balance.

[quote:28f21f177a]Does the mortgage company that holds the first have the right to make us pay for the previous owners accumulated interest, back taxes and realtor fees just to sell the house?[/quote:28f21f177a]
I don't think the company will make you pay. But whatever is left from the sale proceeds after the first mortgage is paid off, will pass on to you.

I've also shared my thoughts at http://www.mortgagefit.com/second/newmtgbill.html . Please have a look.

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vegas_storms's picture
vegas_storms | Joined: September 12, 2008 03:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Yes the first will more than likely go after you for any unpaid balance owed to them as the first holds priority over the second.

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

DO WE HAVE FIRST RIGHT TO REFUSAL TO RE-PURCHASE FROM THE 1ST LEIN HOLDER BEFORE IT CAN BE OFFERED TO ANYONE ELSE FOR SALE?

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

DO WE HAVE THE LEGAL RIGHT TO FIRST REFUSAL SINCE WE CARRY THE SECOND?

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi JONATHAN,

Your question is not very clear to me. Are you speaking from the second lender's point of view or the borrower's? As far as I know, there has to be an agreement regarding the right of first refusal. The second lender one should have an agreement with the first lender about right of first refusal. Or else as a second lender, you can buy out the first lender and pay off his dues to make the second loan primary.

Speaking from the borrower's point of view, if you can pay off the first lender, then there will be no need to foreclose the property. And if the first lender declares a foreclosure, you will still be liable to pay off the second loan.

To know more about right of first refusal, check out the following link:
http://www.mortgagefit.com/refusal-right.html

Thanks

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carguy's picture
carguy | Joined: January 24, 2009 05:28 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

WE CARRIED THE 2ND MORTGAGE, THE MORTGAGE NOTE AND DEED WERE RECORDED IN OUR COUNTY. I NEVER RECIEVED A NOTICE OF ANY KIND ABOUT A 1ST MORTGAGE FORCLOSURE, WHICH, HAD I RECIEVED ONE I WOULD HAVE THEN INITIATED THE REPURCHASE FOR THE PROPERTY. I NEED LEGAL ADVISE ON HOW I CAN STOP THE SALE OF THIS PROPERTY TO ANOTHER BUYER. I NEED TO RECLAIM THIS PROPERTY ASAP.

ps. I AM A RESIDENT OF GREENVILLE, MICHIGAN.

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jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi carguy,

Your query has been answered in the given link:
http://www.mortgagefit.com/foreclosure/repurchase-home.html#74601

Please check it out, I hope it will help you.

Thanks

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

need the information, of making an 2nd mortgage of my property, so what are the terms and conditions and powers requierd to that

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dollylee9's picture
dollylee9 | Joined: July 19, 2009 03:44 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

you should provide top most priority to clear 1st mortgage

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

sold the house,but just found out the when they did a title serch they found out the there was a second mortage taken out.That was pd off. But the first mortage was never signed off on now I think they owe a lot of money because. They say that is back taxes and Int payments. My question is do you have to pay off the first mortage before you pay off the second.

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

there is a specific reason why one is called first and the other is called second. it's simple - whoever is first is first, and whoever is second is second. priority is always with the first mortgage, as it is first. second sucks wind if there's a lack of equity when a home is sold, though most second mortgagees can try to recover by way of a deficiency judgment after a sale.

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jenkin7's picture
jenkin7 | Joined: June 4, 2007 11:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guest,

The first mortgage lender holds the first priority lien on the property. This is why they have the first right to foreclose on your property, if you default. If you sell your property, you will have to pay off the first mortgage prior to paying off your second loan. You should contact the first lender and keep making payments on the loan. If you stop payments, they can foreclose the property. As long as you make payments on the first mortgage, you have no problem.

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