AboutDick Dennis Expertise With more than 37 years as a real estate broker, I can solve most any problem presented. If I can`t, I do my research. Problems with mortgages, trust deeds, foreclosures, odd ways of conveying titles. Most any good Realtor can answer questions satisfactorily, but I answer questions that most cannot. Also, ask about my hard-copy newsletter.
Experience Problem solving since 1980
Organizations National Association of Realtors
Publications Publishes The Landed Gentry, guest writer in Who's Who in Creative Real Estate, First Tuesday, Financial Freedom and many newspapers
Question I lost my job and have a first mortgage worth 40,000 and a second worth 15000. I have been paying on my second but cant afford to pay on my first. The bank knows this and I have had my house for sale now for 6 months, if it doesnt sell by June I am doing a deed in leui of forclosure! What happens with my second mortgage if I continue to make my payments on it! What options do I have?
Answer That's a complete waste of money, Bradley. What is going to happen is that the second mortgage will find out that you're not making the first payment and then THEY (the second) will foreclose. So, you can see why the payments you're making to the second is a waste. They will foreclose as if you haven't made any payments to them, too. On top of that, the second will foreclose a little bit faster because they have their principal at stake. Because if the first would foreclose, the second gets wiped out . . . unless the second shows up at the foreclosure auction to bid. Of course, the second will want to protect their position . . . unless there isn't any equity in your house to cover the second.
For example, if your house was worth only $40,000, the second may not even show up at the foreclosure auction, knowing that if they foreclose and take over the house, they would not be able sell it for more than what they paid for the first. They can wipe out their second position in their books. But in any case, the money you are sending to the second is a waste if you do not pay on the first.
As far as giving the first a deed in lieu you first have to make sure you are informing them that you are doing that. Otherwise, if they choose not to accept it, that is a waste as well.
Where is the property located, what kind is it, size, etc.? I might have another idea for you. Contact me at my email address below. I do wish you well.
