Second Mortgage?
October 10, 2008 - I'm going on 3 months past due now on my mortgage. In other words my home is going into forclosure. I have a second mortgage that I am gonig on 2 months past due. I'm unable to catch up on my home mortgage. I want to know should I continue to pay the second mortgage? I already know that forclosure is in the making. Don't the second mortgage get paid first when the home is sold. (Florida)
- No, The mortgage in first position gets paid first. First position is determined by the age of the loan. In this case, your first mortgage is in first position and gets paid off first. They are also the only one that can really foreclose on your home.
It sounds like you're in a pretty tough situation. I would continue making payments if you can, and try to keep the house OUT of foreclosure. Try and sell it before you give it back to the bank. A foreclosure is really bad for your credit, and you may also want to contact a bankruptcy attorney. If you need to sell quick, I may have a buyer in the Florida area on my buyers list. E-mail me info about the property.
There is no point in continuing to pay on the second. Either mortgage can foreclose on your house. The first mortgage will get paid first so you want to keep them happy. There is very little chance the second will get anything from the sale of your house. If you can catch up on the first, you can probably make a deal with the second. They would rather get something than nothing.
First that gets paid is anyone with liens on the house Second is your second mortgage holder Third or last if the original mortgage holder Why? Because they get the house, and have the most vested in it. They will then attempt to sell it, if it does not sell for the amount due (might even go to auction) you will either end up with a judgment against you for the difference, plus attorney fees, interest, additional taxes, etc, or they will write it off and send you a 1099 for the amount of the write off. (In a few states that is mandatory) Then you will be responsible for all the local, state, and federal taxes on that money, taxed at the rate as if it was a bonus which runs accumulative at around 30-36%. The Government taxing bodies have no restraint in either pay now, or we garnish your wages, tax returns etc with interest until it is paid off.
Vick is wrong - the 2nd mortgage holder CAN and WILL foreclose if the 1st one doesn't. An HOA can even foreclose if you're behind on their payments too. If they're going to foreclose and you don't have any plans on fighting it, why pay any mortgage? Save up for a deposit on an apartment. They'll pay the 1st mortgage first and then the 2nd. Any balance will result in a judgment, potential garnishment and leins, etc...
- Both of these people are right and wrong. The second WILL NOT foreclose if there is no equity in the home for their position. Bottom line if you can't afford the home go to www.platinumreic.com and let them help. If I were you and there was no equity I would not pay the 2nd.
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