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If the second mortgagee forecloses and takes possession of the property it must pay the first mortgage or if they sell to a third party that party takes the property subject to the first mortgage.
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∙ 16y ago
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What could happen if you have 2 mortgages on the same property and you only default on the smaller of the 2 mortgages?
A mortgage is a promise that you make to the lending company. You promise them that if you don't pay back the loan, then they can have your house. It's no different for the second mortgage except that if you fail to pay either bank, and they both want your house, then the first mortgage holder always wins. If you default on your second mortgage..then they have the right to foreclose and sell your property BUT they have to pay the balance on your first off. If you defalut on your first mortgage then they will give notice to your second mortgage company and give them the option to "accelerate " the mortgage and they can foreclose..but if the second does not then the first mortgage can foreclose and sell your property and only pay the second off if there is enough money from the sale. It really doesn't matter if the mortgage balance is the "smaller" it is who is recorded in first & second lien position.
What happens to the first mortgage when the second mortgage is foreclosed on?
It depends....the 2nd mortgage holder can buy out your first mortgage and then foreclose on the entire property , the chances are higher of this happening is the 2nd mortgage is kinda large or if they are held by the same lender. If the 2nd mortgage holder decides not to buy the first mortgage out then typically nothing with happen because the first mortgage holder is in control. The 2nd mortgage cannot foreclose on the first mortgage so keep the first mortgage payments current.If the 2nd does not buyout the first then the lien with remain on the property and you will be require to pay it off if you sell or refinance the property down the road.Mortgage loan officer PAIn Texas the law is: http://www.avvo.com/legal-answers/tx-foreclosure-second-trust-deed-4498.html
Why does the second mortgage holder have to approve of the first mortgage refinance?
The second mortgage holder typically needs to approve the first mortgage refinance because they hold a subordinate position to the first mortgage. Refinancing the first mortgage could impact the second mortgage holder's position, so their consent is often required to make changes to the primary loan.
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.
Who pays your home equity loan when you die?
Your estate is responsible. If the equity mortgage is not paid the bank will foreclose on the property.
What rights does a second mortgage holder have if owner defaults on his loan?
The second mortgagee can foreclose and take possession of the property. However, it would take possession subject to the first mortgage.
Your home recently foreclosed you had a first and second loan The first loan handled the foreclosure487k now you are left with the second loan 117K What happens now?
When your home is foreclosed on, the first or second can start the process. If you have a first mortgage and a second mortgage, your first mortgage is the first lien holder. Therefore if the second was first to foreclose they would have to pay the balance or negotiate the balance (agree to lower payoff). When a home is foreclosed on, all debts against the home are extinguished.Normally in a foreclosure the first mortgage will not negotiate with the second mortgage, in this instance the second mortgage would be out of the picture. VALUE (appraisal) plays a huge role in this process.
What could happen if you have 2 mortgages on the same property and you only default on the smaller of the 2 mortgages?
A mortgage is a promise that you make to the lending company. You promise them that if you don't pay back the loan, then they can have your house. It's no different for the second mortgage except that if you fail to pay either bank, and they both want your house, then the first mortgage holder always wins. If you default on your second mortgage..then they have the right to foreclose and sell your property BUT they have to pay the balance on your first off. If you defalut on your first mortgage then they will give notice to your second mortgage company and give them the option to "accelerate " the mortgage and they can foreclose..but if the second does not then the first mortgage can foreclose and sell your property and only pay the second off if there is enough money from the sale. It really doesn't matter if the mortgage balance is the "smaller" it is who is recorded in first & second lien position.
Can a mortgage co that is only a servicer not a lender foreclose on property?
Please be more specific in your question so I can help you. Who did you get the loan from? who holds the note? what position are they first, second, third, I will try to help
What happens to the first mortgage when the second mortgage is foreclosed on?
It depends....the 2nd mortgage holder can buy out your first mortgage and then foreclose on the entire property , the chances are higher of this happening is the 2nd mortgage is kinda large or if they are held by the same lender. If the 2nd mortgage holder decides not to buy the first mortgage out then typically nothing with happen because the first mortgage holder is in control. The 2nd mortgage cannot foreclose on the first mortgage so keep the first mortgage payments current.If the 2nd does not buyout the first then the lien with remain on the property and you will be require to pay it off if you sell or refinance the property down the road.Mortgage loan officer PAIn Texas the law is: http://www.avvo.com/legal-answers/tx-foreclosure-second-trust-deed-4498.html
Why does the second mortgage holder have to approve of the first mortgage refinance?
The second mortgage holder typically needs to approve the first mortgage refinance because they hold a subordinate position to the first mortgage. Refinancing the first mortgage could impact the second mortgage holder's position, so their consent is often required to make changes to the primary loan.
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.
Who pays your home equity loan when you die?
Your estate is responsible. If the equity mortgage is not paid the bank will foreclose on the property.
If 1st mortgage is forclosed on and 2nd mortgage doesn't get any money can they sue for the balance?
Yes. The mortgage exists as collateral for the second mortgage loan. If the second mortgage loan is not satisfied at the foreclosure sale, the second mortgage lender merely loses the collateral but not the loan and it can sue the now former homeowner for the unpaid balance. This is no different than if there is insufficient money from the sale to pay the first mortgage holder in full. The first mortgage hold can file a lawsuit later to recover the deficiency between the actual loan amount and all credits the homeowner is entitled to receive.
What reasons would a mortgage lender not want to be subordinate?
Because they will lose their position in collected if you default on your loan. To be subordinate would be in Second or Third position and if they had to foreclose, they would only get "what's left" after the 1st mortgage holder took theirs.
What is second home mortgage?
A second home mortgage is a loan that you take to purchase your second home.
When there are two names on a deed can one get a mortgage loan or do both parties have to sign for the loan?
Al the owners must sign the mortgage or the bank will not be able to foreclose on the property in case of a default. If there is another owner you cannot grant a mortgage on their interest in the property.Al the owners must sign the mortgage or the bank will not be able to foreclose on the property in case of a default. If there is another owner you cannot grant a mortgage on their interest in the property.Al the owners must sign the mortgage or the bank will not be able to foreclose on the property in case of a default. If there is another owner you cannot grant a mortgage on their interest in the property.Al the owners must sign the mortgage or the bank will not be able to foreclose on the property in case of a default. If there is another owner you cannot grant a mortgage on their interest in the property.
