We are current on both 1st and 2nd mortgage payments but starting soon the 2nd mortgage payment triples. It is going to be very difficult to pay it and we may be forced in to foreclosure if neither mortgage holder will refinance so we can put both together in a fixed mortgage rate. Both my husband and I have good, steady jobs but while he was out of work I'm sure our credit score took a huge beating. He owned a business and had to close/file for bankruptcy. Even though he found a job and has been on it now for over a year and I've been on my job for over 10 years, I'm worried that the possibility of getting someone to do a mortgage for us may be difficult because of the market and those circumstances. Here's my question: If you or someone you know has been involved in foreclosure, please let me know if after the foreclosure did the 1st or 2nd mortgage holders attempt to collect anything from you.
We had a 1st (fixed 30y) and 2nd (fixed 10y) and couldn't roll them together because of the house value. I contacted the 2nd and they let us redo the terms of their loan, no extra money out, just the balance of the loan, to a fixed 30y which cut the payment in half.
We were in an interest only ARM that was about to triple. We saw it coming and tried for 4 years to get into a fixed rate. We didn't even want them to lower the principal or anything, just get us into a fixed rate with a normal interest rate since ours was also very high. Since we didn't qualify for a refinance, loan modification or any other program that was out there, we tried to short sale. We got two offers which the bank turned down. They put our house on the market right after they foreclosed and it's been sitting there ever since. We couldn't sell it the normal way or with a short sale so I imagine it'll just sit for awhile. Anyway, we looked into what would happen to us and we live in a non-recourse state. We looked into what would happen if they sent us a 1099 or whatever it's called for taxes and we don't have to do anything. That's just our situation and our state. We took a class at our church to see what we needed to do. Anyway, you can check your state laws to see if you live in a non-recourse state or not. Also, mortgage companies will send tax info whether or not you need to pay taxes on it. So don't assume you do if you get something. Look into it ahead of time. Ask your tax person, they should know. that's what we did. Good luck!!
Call the lender on the 2nd lien and tell them about your concerns with the upcoming payments. So many lenders are willing to work with you to modify your mortgage so that you don't go into foreclosure. Foreclosure hurts everybody, including lenders. You'd be surprised at how much lenders are willing to do to help you stay current and in your home. Lenders are there to make money on the interest you are paying, not to make money by trying to sell your house.
Please check into the new programs available for home refinance, short sale, and foreclosure. The laws recently changed so people's experiences several years ago are not necessarily what you'll find now. Also... If you can't refinance, do a short sale and not a foreclosure. The damage to your credit is muchless severe.
I would contact a non-profit agency in your state that handles foreclosures and such to find out the answers to your questions, as each state varies(we contacted Greenpath 1-800-550-1961). I live in NJ and unless you go thru a certain type of short sale you are responsible for the difference. Our realtor was telling us that in NJ that 2nd mtge holders are only entitled to something like $3,000 in a foreclosure, but again that is in NJ. The best bit of advice that I could give you would be to keep excellent documentation of everything! Went to hell & back w/the modification loan attempts (3 of them) to the short sale of our home - we are supposed to be closing tomorrow, but just be patient and realize that there will be an end to it, eventually. And best of luck to you.
Yes, they absolutely will collect the difference between what they were able to recoup from the sale of the home and the balance of the note. That is a standard practice.
No one tried to collect from me. I would suggest that you try to get some help from the many programs that are on the back of your mortgage statement. I think one of them is called the HELP program and there is also the HAMP program. I got no help from these programs. They kept sending me papers that I needed more info. I know there has been a lot of money set aside to keep us all in our homes. LOL LOL
