Is there a situation when a lender can make you come up with the difference between home value and loan value?
2007-12-11 15:23:50 · 7 answers · asked by Johnny 1 in Business & Finance ➔ Renting & Real Estate
It has no effect unless you try to refinance or sell.
But if you are like me and actually bought the house I could afford and plan to live in for a long time, you will be fine.
Thank gawd we didn't listen to our greedy mortgage broker who wanted us to buy a house for $300k more than what we did. Idiot (who is now losing his house).
The only real drawback is your property taxes are based on the price you paid, so now you are overpaying. But we might as well get used to paying more in taxes than we can afford, THAT won't get better, ever.
2007-12-11 15:31:16 · answer #1 · answered by Gem 7 · 2⤊ 3⤋
The answer depends on what type of bankruptcy you file. Under Chapter 7 (the Liquidation Chapter), you cannot get rid of the second mortgage. But, under Chapter 13, it is possible to "strip" the second mortgage so that it becomes an unsecured loan. This is only possible if the home value is not high enough to cover the 1st mortgage. If there is even $1 available to pay to the 2nd mortgage, the loan cannot be stripped. If the home value is low enough, you will have to go through the entire Chapter 13 repayment plan (typically 5 years, but may be less depending on income). The second mortgage company would receive pro rate payment with all other unsecured creditors. Any amount not repaid during the plan would then be discharged. You should talk to a bankruptcy attorney in your area. Most will give free consultations.
2016-05-23 04:08:55 · answer #2 · answered by laurel 3 · 0⤊ 0⤋
As long as you honor the terms of your mortgage, the lender will take no action to cause you to come up with any shortfall due to decreasing values. These days, lenders are thrilled with borrowers who pay as agreed.
Your only issue will arise when you either attempt to refinance or sell. At that point, you would have to come up with any deficiency amount.
2007-12-11 16:15:13 · answer #3 · answered by acermill 7 · 1⤊ 0⤋
If you try to refinance it will change your loan to value (ltv). If your house can not get a appraisel for even close to what you owe, that is not a good sign and you may not be able to refinance. Are you asking if you sell your house for less than what you owe?
2007-12-11 16:20:46 · answer #4 · answered by sweet_cowgirl19 3 · 1⤊ 0⤋
It's called "being upside down." No, I don't think the lender can do anything as long as you are making the payments.
2007-12-11 15:27:55 · answer #5 · answered by hottotrot1_usa 7 · 1⤊ 0⤋
Not unless you try to sell it, then you must bring the difference to closing in order to transfer clear title.
Otherwise, you have negative equity, but you make payments as usual.
2007-12-11 15:32:10 · answer #6 · answered by Expert8675309 7 · 1⤊ 0⤋
This question is worth more attention
2016-08-26 11:13:59 · answer #7 · answered by Anonymous · 0⤊ 0⤋