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What happens to the second mortgage if the first mortgage is paid off?
Wiki User
∙ 13y ago
you then only have to pay the second
Wiki User
∙ 13y ago
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What does a primary mortgage lender do?
The primary mortgage lender holds the first mortgage. If his mortgage is not paid, he sells the property. He gets paid. You may have a second mortgage. If the second mortgage lender is not paid, he can sell the property. If he sells the property, the primary mortgage lender gets paid first, then the secondary lender gets paid.
How does a second mortgage appear on your original mortgage?
When a person or family buys a home with a mortgage, it is registered with the county or city registry as the first mortgage. The first mortgage is paid off first in whatever case. A second mortgage on the other hand is a secured home equity loan against the same property. If you default on your mortgage payments the lender has to wait after the till the first mortgage is paid. For this reason the second mortgage rates may be higher. Second mortgages are usually smaller loans.
With a Ch.7 can you reaffirm your first mortgage but have your second mortgage dismissed?
NO. The second mortgage is still secured by the property. Therefore it has to be reaffirmed or paid according to the stipulations of the lender.
What happens to the first mortgage when the second mortgage forecloses?
AnswerThe first mortgage would have the first position on the lien. So if the second mortgage company foreclosed on the property - they would sell the property and the sale proceeds must go to pay off the first mortgage company first. Then, if there is anything left over, that money goes to the second mortgage company.For example, there is a first mortgage of 100,000 and a second mortgage of 40,000. The property is foreclosed and sold for 125,000. The first mortgage gets paid off (100,000) and the second mortgage company gets the remaining 25,000.The property owner still owes the second mortgage company the other 15,000.--------------------------------------------------------------------------------------------------------------Not true. Maybe different laws in different states but here the 2nd mortgage foreclosure sale does not directly effect the 1st mortgage. It remains a lien.
Can a buyer of a second mortgage reinstate the first and make monthly payments even thought the first mortgage is under the name of the previous owners?
The buyer of a second mortgage is buying the rights of the mortgagee (lender) under the second mortgage. A buyer of a mortgage is correctly called a mortgage assignee. Therefore, the buyer of the second mortgage is subject to the first mortgage. The first mortgage needs to be paid, not "reinstated".The property remains subject to the first mortgage until it has been paid off. Even if the property is transferred to a new owner the property is subject to the first mortgage and the second mortgage if there was a second mortgage recorded in the land records. The second mortgage always remains subject to the first mortgage until the first mortgage has been paid.Note that a property subject to a mortgage is subject to all the terms of that mortgage. Mortgages have boilerplate "due on transfer" clauses. That means if there is any transfer in ownership of the property, the lender will demand payment of the mortgage in full, immediately.It sounds like you need to discuss this with an attorney who can review the details of your situation and explain your options.
What risk is inherent in second mortgage loans?
the main risk is that the first mortgage will not be paid. if the first mortgage is not paid, goes into default, and is foreclosed, the second mortgage will be determined in the foreclosure sale.
What does a primary mortgage lender do?
The primary mortgage lender holds the first mortgage. If his mortgage is not paid, he sells the property. He gets paid. You may have a second mortgage. If the second mortgage lender is not paid, he can sell the property. If he sells the property, the primary mortgage lender gets paid first, then the secondary lender gets paid.
How does a second mortgage appear on your original mortgage?
When a person or family buys a home with a mortgage, it is registered with the county or city registry as the first mortgage. The first mortgage is paid off first in whatever case. A second mortgage on the other hand is a secured home equity loan against the same property. If you default on your mortgage payments the lender has to wait after the till the first mortgage is paid. For this reason the second mortgage rates may be higher. Second mortgages are usually smaller loans.
With a Ch.7 can you reaffirm your first mortgage but have your second mortgage dismissed?
NO. The second mortgage is still secured by the property. Therefore it has to be reaffirmed or paid according to the stipulations of the lender.
What happens to the first mortgage when the second mortgage forecloses?
AnswerThe first mortgage would have the first position on the lien. So if the second mortgage company foreclosed on the property - they would sell the property and the sale proceeds must go to pay off the first mortgage company first. Then, if there is anything left over, that money goes to the second mortgage company.For example, there is a first mortgage of 100,000 and a second mortgage of 40,000. The property is foreclosed and sold for 125,000. The first mortgage gets paid off (100,000) and the second mortgage company gets the remaining 25,000.The property owner still owes the second mortgage company the other 15,000.--------------------------------------------------------------------------------------------------------------Not true. Maybe different laws in different states but here the 2nd mortgage foreclosure sale does not directly effect the 1st mortgage. It remains a lien.
What happens if the first mortgage is okay but the second mortgage has been sent to a law firm that deals in debt collecting now does the whole loan need to paid now or just the 700 that is behind?
If you pay the $700 you should be ok on the first loan
Can a buyer of a second mortgage reinstate the first and make monthly payments even thought the first mortgage is under the name of the previous owners?
The buyer of a second mortgage is buying the rights of the mortgagee (lender) under the second mortgage. A buyer of a mortgage is correctly called a mortgage assignee. Therefore, the buyer of the second mortgage is subject to the first mortgage. The first mortgage needs to be paid, not "reinstated".The property remains subject to the first mortgage until it has been paid off. Even if the property is transferred to a new owner the property is subject to the first mortgage and the second mortgage if there was a second mortgage recorded in the land records. The second mortgage always remains subject to the first mortgage until the first mortgage has been paid.Note that a property subject to a mortgage is subject to all the terms of that mortgage. Mortgages have boilerplate "due on transfer" clauses. That means if there is any transfer in ownership of the property, the lender will demand payment of the mortgage in full, immediately.It sounds like you need to discuss this with an attorney who can review the details of your situation and explain your options.
What can a lender do when the second mortgage is not paid in full due to foreclosure?
Assuming that the FIRST mortgage was foreclosed, a foreclosure wipes out any mortgages that were recorded after the foreclosed mortgage.
Can a second mortgage put a lien on a home that is not foreclosed but I owned as a primary home however since foreclosure the first mortgage was paid its full amount and the second mortgage nothing?
A second mortgage already has a lien on the home. If you don't pay the second mortgage they will foreclose and take the home. By paying off the first mortgage you just make it easier for the bank to get their money back out of the property when they sell it.
Why are interest rates on a 2nd mortgage higher than on a primary mortgage?
A second mortgage is generally riskier for a lender because the second mortgage is subordinate to the primary loan. This means that if the loan defaults, the first mortgage is paid off first and the lender risks losing the money put up for the second mortgage. To cover the extra risk, there is a higher interest rate placed on the second mortage.
What if you pay your first mortgage but not your home equity?
If you have a first mortgage and a home equity mortgage, the home equity mortgage is a second mortgage. If the home equity mortgage is not paid, the lender can foreclose and take possession of the property subject to the first mortgage. The home equity lender can pay off the first mortgage and keep any excess proceeds from a sale.
Can you refinance a second loan only and not the first?
Yes, but the holder of the second has to agree to it. Its called subordination. Normally when a first mortgage is paid off the second moves into the first position unless the holder agrees to "subordinate" the second. Yes, you can leave the second alone but the second mortgage company will have to allow it by signing a subordination agreement. Basically, a subordination agreement is an instrument that allows a first lien or interest to be paid off and allows another first mortgage company to come in and be the first priority lien holder.
