Many people are breathing a sigh of relief, knowing that, for the past several months, foreclosure rates have declined. It has become more feasible for homeowners to keep current on their primary mortgage payments. However, can a second mortgage lender foreclose on your home? The following will look into the answer to that question, so no homeowner feels mistakenly comfortable in home.
Pittsfield, MA -- (SBWIRE) -- 01/24/2013 -- The answer to can a second mortgage holder foreclose on one’s home is yes, even if the primary mortgage is current. No lender wants to foreclose, as it is an expensive procedure that seldom results in the lender recouping its money. However, the lenders that granted the mortgage loan are entitled to get back as much money as possible. If a monthly mortgage payment in not received within a 150 day time frame, the lender can foreclose. It doesn’t happen very often that a second, or junior, lien holder starts foreclosure proceedings without the first, or primary, lender doing so also. Often, the first and second lenders will make an agreement in which one buys the interest in a property from the other so only a single lien holder is foreclosing.
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The query can a second mortgage holder foreclose on your home? has already been answered positively. A junior lender can, indeed, instigate foreclosure proceedings if the homeowner is delinquent more than 150 days. It does not, however, make good fiscal sense for a second mortgage holder to carry out this action. Usually, a primary lien holder will file foreclosure at the same time as a secondary one, meaning that the first mortgage servicer will be paid off before the second one is even looked at. This most frequently results in the junior mortgage holder getting little to nothing back on its investment.
So when can a second mortgage holder foreclose on one’s home? It has already been noted that after non-payment of the mortgage goes beyond 150 days, a lien holder can foreclose. Also, if no attempt has been made to reach an amicable, reasonable mortgage repayment schedule during the 150 days, foreclosure proceedings may be instigated. When a foreclosure sale of a house garners less than what is owed on the property, it results in an unsecured balance, called a “deficiency balance,” which the former homeowner is held responsible for. After the home no longer belongs to the person foreclosed upon, he is liable for the amount of money due to the lender and must make arrangements for payment of it.
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