Why does my second mortgage company want my money?

This is because your second mortgage lender either sold your debt to a collection agency, who now wants to recover its money, or the mortgage company turned it over to its internal collection department to continue the effort. The lender wants its money.

Is it bad to default on your second mortgage?

Defaulting on your second mortgage is never a good decision, but sometimes life happens and it is unavoidable.

Is it worth negotiating a lump sum for my second mortgage?

If, however, you are behind on your second mortgage, especially significantly behind, then your chance of negotiating a lump-sum payment just went up. If you have only a few outstanding debts and the resources to pay a lump-sum settlement for your second mortgage, it is worth giving it a try.

Where can I find the National Mortgage Settlement?

For information about the National Mortgage Settlement, visit www.nationalmortgagesettlement.com . If you’re having trouble paying your mortgage, contact the CFPB at (855) 411-2372 to be connected to HUD-approved housing counselor.

What happens in the event of a second mortgage?

Lenders who take a second mortgage don’t have the same guarantee. In the event of a foreclosure, your second lender only gets paid after the first lender receives their money back.

How can I settle my defaulted second mortgage?

Before a debt purchaser can proceed with any foreclosure action, they have to file documentation on the ownership change at that office. If you’re still dealing with the original creditor and wish to resolve the defaulted mortgage, then a phone call to the bank or lender will usually be routed to their recovery department.

Is it risky to have a 2nd mortgage?

Overall, when dealing with a 2nd mortgage, it’s risky, no matter what happens. A chapter 13 which would allow stripping off the 2nd mortgage, is risky too.

Is it better to settle second mortgage or foreclosure?

In my experience, it’s far better to resolve a defaulted second mortgage or HELOC with the original bank or lender, before it gets sold to an investment firm. A “surprise” foreclosure can certainly happen when the original lender has determined that the home is now worth enough to justify the move.

Can a second mortgage be taken out against a property?

A second mortgage is a lien taken out against a property that already has a loan on it. A lien is a right to possess and seize property under specific circumstances.

How many payments can you make on a second mortgage?

You only make one payment a month with a refinance. When your lender refinances a mortgage, they know that they already have a lien on the property, which they can take as collateral if you don’t pay your loan. Lenders who take a second mortgage don’t have the same guarantee.

What to do when your mortgage is sold?

All you have to do is ask. Big mortgage lenders, like nationwide banks, won’t make that promise. Smaller, more local lenders, like credit unions, might. If you want to avoid having your mortgage sold, start your search with local banks and credit unions. The bottom line is that your mortgage is likely to be sold.

What happens to your home when you get a second mortgage?

Your home equity determines how much money you can get when you take out a second mortgage. Unless your mortgage loan has a balance of $0, you don’t technically own your home. Your mortgage lender owns a percentage of your home until you finish paying back the loan.

Can a mortgage be sold more than once?

“Sometimes, a mortgage loan can be sold multiple times without the borrower’s knowledge if the servicer doesn’t change with the sale,” says Whitman. If your loan is sold or transferred and the servicer changes, here’s what to expect and do:

Which is an example of a second mortgage?

A few common examples of second mortgages are home equity loans and home equity lines of credit (HELOCs). A senior lien, such as a first mortgage, takes priority over a junior lien, such as a second mortgage. Priority determines which lender gets paid before other lenders after a foreclosure sale.

What happens when your mortgage loan is sold?

Lenders sell loans for many reasons, but your loan terms don’t change Your current lender must notify you of the change at least 30 days in advance It will tell you where to send your payments and who to contact with questions If you get a notice from a new servicer without notification from your current servicer, don’t send any money.

What to do when your second mortgage is written off?

You can contact the lender or collection agency and make arrangements for new payments and start paying it off. It might be possible to offer a settlement amount that the collector will accept and agree to not pursue the balance once you pay that amount. As a last resort, you can file bankruptcy,…

Can a second mortgage holder foreclose on a house?

The second mortgage holder can absolutely foreclose as long as the house is still attached to the loan for collateral. It is not common for the lender to take this step, but it can and does happen, which makes it even more important that you not ignore the problem, but instead take steps to get it resolved.

Defaulting on your second mortgage is never a good decision, but sometimes life happens and it is unavoidable.

How to deal with a defaulted second mortgage?

Always deal with any debt collector in a calm, professional manner. Additionally, seek legal advice if a debt collector sues to collect on a defaulted second mortgage. Legal advice on debt collections can often be had from legal aid societies or lawyers offering free counsel.

Can a debt collector Sue you for a second mortgage?

To collect on debt such as your defaulted second mortgage, the debt owner can sue you in civil court. However, a debt collector must prove it’s legally entitled to collect on a debt. Because a defaulted debt is often frequently bought and sold, it could be difficult for a debt buyer to prove legal ownership.

What happens when a second mortgage is charged off?

He sells off or assigns the debt to a collection agency that’ll collect the payments on his behalf. So, your debt hasn’t been canceled or forgiven. When a second loan is charged off after a foreclosure/short sale on the property, the mortgage is considered as an unsecured debt since the collateral has been sold off already.

What happens if I default on my second mortgage?

If, on the other hand, you default on a second mortgage, whether that lender will initiate a foreclosure depends mainly on the current value of your home.

What happens if you have a second mortgage in California?

California’s non-recourse loans protect you from deficiency judgments, but the laws do not apply to second mortgages. If you had a second mortgage on your foreclosed home, you still are obligated to pay it. The debt is unsecured, but lenders can seek other means of collecting the money.

Can a second mortgage lender foreclose on Your House?

If you are current on your first mortgage and become delinquent on your home equity loan (which is a form of second mortgage), the second mortgage lender has the legal right to foreclose on your house and property.