what can happen if i paid the mortgage but not the equity loan?
can you explain me more this
2007-12-15 14:35:46 · 14 answers · asked by marina m 1 in Business & Finance ➔ Renting & Real Estate
The holder of the second will foreclose and take your house.
The second can still foreclose and seel the interest that the xecond has. Often the second will not get very much at the foreclosure sale, or the second may choose to bid the amount of the loan that the second has.
In either case, you lose your house.
If the second fails to bring the holder of the first current, then the holder of the forst can foreclose and take your huse away from the holder of the second.
You cannot let either loan slide if you want to keep your house.
2007-12-15 15:00:01 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Then the HE loan would be in the position to foreclose - and the only way they could do that is by buying out the primary mortgage. The funny thing is that they won't WANT to do it until the home is worth more than the mortgage. So that means, they won't foreclose until they know they can make their money back when they buy out the house. So, you could continue living in the house. The downside is that, once you pay it down enough for them to justify foreclosing - they will. And you will have a hit to your credit report of nonpayment - which will evaporate seven years from the date you either start paying, or you sell the house and pay off the HE loan. If they do foreclose, that is a bigger hit to your credit. Either way, I would stay in contact with them. And if you decide to discontinue paying the second HE Loan, then be up front and tell them, and explain to them why - they may have a program to help you.
This is a decision a lot of homeowners are facing right now. Good luck. Look into the legislation Congress is passing right now to freeze your interest rates.
2007-12-15 14:47:58 · answer #2 · answered by Christopher B 6 · 0⤊ 0⤋
First you'll wreck your credit (which you'll need even if you want to rent somewhere). The second mtg will eventually forclose. You are losing equity in your home since the penalties/fees will keep heaping up on your second mtg.
Try something else. Contact your lender. President Bush announced last week HELP for folks that have been saddled with this situation. Do a google search...it has to do with allowing you to refinance into a different mortgage and at a lower rate (which equals lower payment). They will ask you some questions to see if you "pass the tests" for this program. One is that your credit score has to not go up by a certain amount - in other words you have to be struggling and you can't be more than 30 days past due on your mortgage.
Don't lose your house. I am a manager at a lender and they will take it eventually. They will forclose and sell it. in today's market it will probably not sell for what you owe on it and guess what - you'll have to pay whatever loan amount is left. yep, you'll lose your house and still have to pay on the remaining loan balance.
The only way out of that is to file bankruptcy (if you don't intend to pay) and that stops the forclosure temporarily - maybe in time for you to come current.
Google Dave Ramsey before you ruin anything - he's got all his books on CD for $10 a piece during christmas I think - he comes up with ALL SORTS of ways to avoid forclosure and bankruptcy.
2007-12-15 14:45:19 · answer #3 · answered by Michele M 3 · 0⤊ 0⤋
The equity loan is inferior to your mortgage. For the equity lender to foreclose they would have to assume the first mortgage and would be liable for it. Unless you have a lot of equity in your home, that's not likely to happen. If the mortgage lender forecloses, the equity lender is left out in the cold if there isn't sufficient proceeds from the foreclosure to pay off the mortgage and the equity loan.
Given the choice, let the equity line slide but get back on top of it as quickly as you can, especially if you have a lot of equity in your home.
2007-12-15 14:43:36 · answer #4 · answered by Bostonian In MO 7 · 1⤊ 0⤋
If you take out a home equity loan you now have two different payments. One for the original mortgage and the one for the equity loan.
2016-05-24 03:44:50 · answer #5 · answered by laurel 3 · 0⤊ 0⤋
you can be taken to collection, eventually. suffer a bad credit history (which means that you can't refinance your loan!!) and yes, if not paid your home can be foreclosed on...as your home equity loan usually has something as collateral...your equity. That means they can sell off your equity to a bank and you would be required to have two mortgages.
You got an 80/20 loan didn't you!?
Or, you bought into taking out a home equity line of credit?!
Whoever sold you that bill of good should be shot!!! I hate predators like that, cause while you suffer they got a fat commission.
I would look around and see if you can refinance, maybe through LendingTree of Ditech.
2007-12-15 14:40:43 · answer #6 · answered by Kiker 5 · 0⤊ 0⤋
If you don`t pay on one and not the other. Would make no difference. The mortgage company will put you down as late payment after 30 days. The second will put you down as late after 10 days of late.
2007-12-15 14:43:32 · answer #7 · answered by Big Deal Maker 7 · 0⤊ 0⤋
Sounds like 2 separate loans equals 2 separate checks equals 2 reports to credit agencies. Are there 2 separate banks? Question not really clear.
2007-12-15 14:42:23 · answer #8 · answered by Toni & B 1 · 0⤊ 0⤋
The bank who owns the equity loan will initate foreclosure.
2007-12-15 14:39:43 · answer #9 · answered by Billy Shat 7 · 1⤊ 0⤋
skip the mortgage not the equity. most banks also have a tax refund loan.. ask about it.
2007-12-15 14:39:19 · answer #10 · answered by councilmanward1 3 · 1⤊ 1⤋