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Foreclosure/2cnd Mortgage


Hello Mr. Clardy,

    I have a question in regards to a second mortgage. I am just going to give you some breif info and then questions? We (my wife and I) have 2 mortgages on our home. The first mortg. balance is 118,000 and the second is 44,000. Both are with HSBC/Beneficial. We recently applied for a Mod. on each mortg. and we were turned down for the first, jury is still out on the second. I was told our income was to high (Funny how I make 7,000 less a year but we still make to much)to qualify. To the best of my knowledge our home value is probably around 120-130,000. We can actually make the first mort. payment fairly well but this second is killing us. The intrest is 13.9% and it is over half of what the first payment is. We are slowly falling behind. My first question is, What would happen if I just stopped paying the 2 mortgage? Next question, how and could we try to settle this 2 mortgage for less than we owe on it (Heard this was becoming popular)? And lastly, do you know if HSBC/Beneficial even does this type of negotiating? Any help and insite you can give would be greatly appreciated.


If you stop making the payment on the second then they should be more willing to talk. If for some reason you went into foreclosure on the first, then the second more than likely will get nothing. Therefore you should be aware of how much power you have in this situation. Otherwise they will try to run over you. The first probably used the federal guidelines, meaning if your payment is less than 35% of your gross income then you do not qualify. The first and second are two separate sources of income for HSBC/Beneficial. Based on the value of the property, in a foreclosure situation the second would probably get nothing. You should be able to get some very nice terms even down to almost nothing for a payment on the second as long as they can keep the balance the same. You should keep me informed so that you do not let them get over on you. If you threatened a chapter 13 bankruptcy then they would probably be considered a non secured creditor, or be wiped out completely. If the trustee allowed them to stay then the trustee would probably give 1% to 5% of what you own them. You need an attorney to give you that answer, because its based on all of your debt and income. The second knowing this would more than likely not even think of foreclosing. Unfortunately this whole thing is very complicated, and might be over your head, so if you think you need more help then you can e-mail me at Good luck!


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James D. Clardy


I have spent the last twenty-five years saving homes from foreclosure in South Carolina. I have extensive experience negotiating with lenders. I have postponed foreclosures for up to four years before the lender finally gave in and let my client keep her home "This is my specialty". One should never give up, even if you think it’s impossible. I know the ropes and can slug it out with the best of them. I can answer questions about what “to do” and what “not to do” during the foreclosure process as well as the pre-foreclosure and post-foreclosure process.


Twenty-five years of stopping foreclosures in South Carolina, to include properties both listed by Realtors and those owned by banks. Foreclosure properties to include pre-foreclosure and post-foreclosure , and what to do next.

I was a Real Estate Broker in South Carolina for the past twenty-seven years.

I have written several articals on E-How

Some college

Past/Present Clients
Thousands over the last twenty seven years

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