Can a mortgage company legally put a lien on someone's primary residence if.....?

Question

they have an investment property foreclosed on? I have a family member in this situation right now. Before you guys attack me that she is scum for not paying, without going into the whole long drawn out story, let me say that she had renters who did her WRONG & she has just gone through a bout of cancer & a long hospital stay. She is single & lives paycheck to paycheck & can't afford to pay this debt back. Is there any other option for her to come out of this besides bankruptcy?

Ok, so really 2 questions:

1) Can a 2nd mortgage company on another house legally put a lien on her primary residence?

2) Is there any way for her to avoid bankruptcy?

Thank you for your time & response to this.

Answer 1

She can sell the property, or, in the alternative, give the mortgage company a "deed in lieu of foreclosure."

If a second mortgage company has already secured a judgment against this person, the judgment is a lien.

I have purposely not discussed "confessions of judgment" which may be included in the second mortgage company's note. I have insufficient facts to even address that issue at this time.

Answer 2

Laws vary by state and the answer will also depend on facts that you have not disclosed.

Most states have what is called a "security first" rule, which means that you must enforce your lien rights first before you can go after the borrower for any deficiency.

Most state also require the borrow to file a judicial foreclosure action if they want to pursue a claim for an deficiency if the foreclosure sale proceeds are not sufficient to satisfy the debt. Judicial foreclosures take longer and are more expensive, so most lender will waive the deficiency and go for a nonjudicial foreclosure.

The bottom line is this: the mortgage company would have to file a lawsuit before it could place an involuntary lien on the primary residence.

Answer 3

If money is owed some place, and you down on your luck and cannot pay the money, then the place that the money is owed to can go after whatever other assets you have, to try to get their money.

Take a look at total assets, perhaps other things can be sold or cashed in to get out from under this debt.

Answer 4

She can try and refinance or she can sell the property or she can hand it back to the lender. Since it is rental property it is not homesteaded and cannot be protected in a bankruptcy.