We bought our home a year and a half ago and got an 80-20 loan. Then last February we refinanced our 2nd mortgage (the 20 percent loan) to pay off our credit cards, etc. It was a HELOC. Then my husband lost his job and was unemployed for almost 4 months. Even with his new job we are not making enough money to pay everything. We live in Washington State and we can't file bankrupcy because we did that 4 years ago and I'm hoping there's some way we can keep the house? Our credit rating sucks now and we cant refi because were maxed on what we can borrow agenst the house. So here's my question: What would happen if we stopped making payments on the 2nd mortgage but kept up on the 1st? Would we still loose the house? Any suggestions would be greatly appriciated.
2006-12-28 20:01:53 · 6 answers · asked by TRACEY D 1 in Business & Finance ➔ Renting & Real Estate
Yes, you could...but it is unlikely at this point. The second mortgage holder has to "stand in line" behind the first mortgage holder to collect his money, that is, in the event the 2nd mtg. holder forecloses, he is obligated to pay off the debt owed to the first mortgage holder before he can claim clear title to the property.
Be aware, though, that if you stop those payment, they just don't go away. They pile up, in addition to the principal amount due on the mtg., and those missed payments are also accumulating additional interest owed. It adds up very quickly, and can drain what little equity you may have in the house in the event of a sale.
***Go to a debt counselor IMMEDIATELY*** They will help you to contact your creditors, explain the situation and work things out for you so that you don't lose your home and the creditors get paid on a new schedule.
No one wants to take your home, they just want their money back. They will work with you through this difficult time to make sure everyone gets what they want.
***Go to a debt counselor IMMEDIATELY***
2006-12-28 20:38:13 · answer #1 · answered by gr8 3 · 2⤊ 0⤋
Depending on how big the second mortgage actually is they might move to foreclose but being that they are in the second position they would have to pay off the first mortgage with any proceeds before they were paid. So in theory if your second was not too large (under 50k) I would think that they would let it slide. If it is large I would suggest you begin making preparations.
I see these horror stories all the time and although it always hurts to lose ones home, you have to know when to say when. If you cannot afford to meet your monthly obligations, then maybe its time to sell. If you dont think you can recoup your mortgage costs in a sale than you may as well roll the dice.
2006-12-29 02:22:26 · answer #2 · answered by Michel D 2 · 1⤊ 0⤋
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2006-12-28 20:16:27 · answer #3 · answered by Katherine A 1 · 0⤊ 3⤋
Id say you negotiate with the both lenders. I'm sure they will work with you so you can arrange to repay what you owe, keep the house and get back on track.
2006-12-28 22:59:40 · answer #4 · answered by ? 3 · 2⤊ 0⤋
get a 2nd job. do whatever it takes to keep your house. if you have to, borrow from family until you've made a dent with the 2nd job income.
2006-12-29 07:18:49 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Hun, thats terrible news..
if you can afford to, please speak with a Financial Adviser ..
Banks are good, but they have their own interests in mind and care about money..
Your Financial Adviser can offer solutions to get you out of this mess without losing your home..
goodluck hun & god bless
2006-12-28 20:06:01 · answer #6 · answered by DeeDee 5 · 0⤊ 0⤋