Many homeowners have been foreclosed on by their lenders over the past decade. However, it is possible to obtain a new mortgage after foreclosure.
Pittsfield, MA -- (SBWIRE) -- 02/18/2013 -- There are also answers to questions about what happens to a second mortgage after foreclosure. Credit-yogi.com will share this information, including:
- Where’s the 2nd Mortgage?
- Who’s Lending
- Financial Criteria
- Governmental Assistance
What Happens to a 2nd Mortgage?
If a foreclosed home sold for less than expected, the second lien holder gets nothing. Any proceeds go to the first lien holder. So what happens to a second mortgage after foreclosure? The 2nd lien holder can take the borrower to civil court. It can also have someone’s wages garnished in some states, or it may choose to charge-off the debt. Doing so does not mean a cessation of the civil suit or collection activity.
Where to Obtain a New Mortgage
Begin the search for a new mortgage after foreclosure with the lender that drew up the original loan. After a certain amount of time, during which a person must show renewed ability to handle his finances, the lender may be willing to take another chance on him. If the application for a new mortgage is denied, look to other lenders or check the Internet. There are many companies online that are quite amenable to lending to those with foreclosure in their past; just be ready for some high interest rates.
Proving One’s Worth
Foreclosure can remain on someone’s credit report for 7 to 10 years. This is a huge indication to mortgage service rs that he cannot deal responsibly with credit. To get a new mortgage after foreclosure, a person must be able to prove he is worth another try. He must pay all of his bills in full and on time for 2-3 years before any reputable lender will even look at him. If he obtained any new credit following the foreclosure, he must handle it sensibly. Taking steps to improve his credit scores will help him get a new mortgage.
Looking for Second Mortgage After Foreclosure Request for More Guidelines
Government Assistance for 2nd Mortgages
Almost 50% of homeowners have a second mortgage. Now the Obama administration’s Making Home Affordable plan allows them to modify their second mortgage after foreclosure. This comes about as a result of increased incentives to lenders and investors. Every mortgage service r that approves a 2nd mortgage modification receives $500 for it, as well as $250 per year if the loan remains current. The borrower can get $250 a year for up to 5 years to lower his principal.
Credit-yogi is a full-service, no-cost consumer resource website located in Pittsfield, Massachusetts. It is backed by more than 260,000 attorneys and financial experts who can provide answers to the questions people have. For a free initial consultation, call 866-964-9644.