What happens if your 2nd mortgage goes into foreclosure, but your first is current?

Can they take the house? How does that work?What happens if your 2nd mortgage goes into foreclosure, but your first is current?
I am a licensed real estate broker helping people in foreclosure.





They can take the house, but if they do, is another story. For example, let's say you have two loans. First loan is 400k and second loan is 100k. The house is worth 250k. It wouldn't make sense for the 2nd to foreclose on you as they will need to pay off the first loan in order to own this property and resell it. So what they will do is charge off the loan after 6 months of non-payment and sell off the debt to a collection company.





what my clients do is when the loan is charged off and if the collection company then pursues a judgment, then the homeowner files for bankruptcy.





That said, it is important to speak with an attorney to better advise you of your rights and the rights of the second lien holder.





Good LuckWhat happens if your 2nd mortgage goes into foreclosure, but your first is current?
Yes they can still foreclose.





The question is will they? And that all depends on their equity position in the home. If they're underwater, most likely not. This is because the 2nd mortgage lender will have to either pay off the 1st mortgage holder or continue making the payments...which doesn't make sense for them if their is no equity (their note is worth zero, so why pay the first mortgage for a note worth nothing).





If there is equity...you betcha ya!!!





You can certainly negotiate your second mortgage lender down. I've seen a lot of them settle for 5-10 cents on the dollar on underwater 2nds.





Or, you can file a Chapter 13 (if you qualify and your 2nd mortgage is underwater) and have the lawyer file a motion to treat the 2nd mortgage as unsecured debt and wipe out your second entirely (it's call ';Lien Stripping';.





Hope that helps.
You need to call 888-995-HOPE for advise. You could save this home from foreclosure. Call and see what programs might help you.





To answer your question, yes they can and will take your house.
Yes, they can take the house.