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The American Dream – Life, Liberty, and the Pursuit of Leveraged...
California AG Brown Stops LifeLock from Misleading Consumers...Renovate Your Home With a Second Mortgage
Many homeowners sooner or later after purchasing their home end up wanting to do some home repairs or maybe even some installations that need to be done. One thing that these people find very difficult to accomplish is coming up with enough cash for the renovation. More often than not the homeowners budget cannot cover all the expenses that come along with fixing up their home. So because of this many times they will have to take on another loan to cover the expenses. Read more
Is it Possible to Settle My 2nd Mortgage?
If you are thinking about trying to settle your second mortgage because you owe more than your house is worth, by all means go for it. Many mortgage lenders are now willing to settle these loans for as low as 5-20% of the remaining balance. Lenders are aware that because of our current economic crisis many borrowers can no longer afford to pay two mortgages each month, and are completely draining their savings to do so. Read more
Settle Your Second Mortgage With Bank of America
Over the past two years Americans have been hit by a major mortgage crisis. This crisis has caused the foreclosure rates across America to skyrocket higher than they ever have before. Foreclosure is especially common with homeowners who have obtained a second mortgage on their property. In the recent past many borrowers obtained this second mortgage through a refinance because the market seemed great. No one knew what was to come in early 2007 when the value of homes began to drop dramatically throughout the states.
One of the largest mortgage holders of all is the popular Bank of America(BofA) and it services countless 1st and 2nd mortgages throughout our country. So because this major lender holds so many mortgages their foreclosure rate is extremely high, and it is very important to contact them right away if you are struggling to pay the monthly bill. As everyone knows loan modifications are not the number one way for a homeowner to prevent foreclosure and remain in their home. But if you have a second mortgage that is killing your pockets each month a modification might not be enough, as it seems much easier to accomplish a modification on your first mortgage. There is not much a lender can do with seconds besides lower the interest rate, and because seconds are generally a small amount this might make very little difference in your payments.
Many people are not aware that BofA actually will sometimes allow a borrower to settle a second mortgage for about five to twenty percent of the loans remaining balance. For example, you may be able to settle your $70,000 mortgage for only about $7,000(possibly even less). Most lenders are now offering this type of assistance because the fact that homes values have dropped a significant amount, and in the event the home goes into foreclosure the second mortgage holder will get nothing from the proceeds.
In order to accomplish this you need to contact your lender and try to negotiate a fair settling price for the loan. It is wise to start out with a low offer at about five percent of the balance and slowly start to work your way up. many times the lender will end up accepting about 10-13% of the balance. Once you have completed the settlement you will be free and clear of your second mortgage and no longer have to worry about making that extra payment each month.
What Is a Subordinate Mortgage?
A subordinate mortgage is a mortgage that is of a lesser priority, or one that is held subordinate to, a primary mortgage. A good example of this would be a second mortgage, or even a third one. The second mortgage is subordinate to the primary, and the third mortgage is subordinate to both of those, etc. etc. By subordinate, this means that if the home goes into foreclosure, the primary mortgage will be paid off first. Then, if there is any money left over, it will pay off the second mortgage. If there is any left after that, it will go to the third mortgage (if there is one)… and so on.
It is much tougher to get a second mortgage than it is to get your first mortgage, but it is even harder than that to get a third. Also, the more mortgages you have on a home, the higher the interest payments will be. This is partly due to the risk involved. Since in the event of a foreclosure it is highly unlikely that a second or third mortgage will be paid off, the risk is countered with higher fees and more excessive interest rates.
So, if you had a property which you still owed $100,000 on from the first mortgage, but you also had a subordinate second mortgage on it, and it went into foreclosure, this is what would happen. If the home sold for $90,000 at auction, then all of it would go to pay your primary mortgage… leaving no funds to pay off the secondary mortgage.
Settling Your Second Mortgage For Pennies On The Dollar
During the past two years homeowners across America have been affected negatively by the mortgage crisis we are currently facing. This crisis has caused foreclosure rates to skyrocket and has left many people unable to pay their mortgage or other debts they have acquired. Especially borrowers who have obtained a second mortgage loan on their home. Many homeowners have obtained this loan through a refinance while the market was excellent.
As we know now this is not the case. Many people are aware of loan modifications since they are indeed now the number one solution for borrowers who are struggling to pay their mortgage. But a loan modification seems much more easy to accomplish on your first loan than on the second. Since a second mortgage is usually a very small monthly payment, there is not always much the lender can do to help besides lowering the interest rate which may not help lower the payment much at all. Read more
Second Mortgage vs. Home Equity Loan
Many people will confuse second mortgages and home equity loans, which is not surprising. They are both a second loan, but they do differ in many different ways.
Second Mortgage:
With a second mortgage the borrower is lent a certain amount of money that is to be repaid on a set schedule. This type of loan will usually have a term of 15-30 years, like your traditional mortgage. Read more
How Does a Second Mortgage Work?
For those who are only familiar with the usual home mortgage loan, they might be wondering what a second mortgage is. In simple terms, this is another loan that is secured against your home but it does not have the same priority as the first mortgage loan when it comes to getting the proceeds from the sale of your home in case of a foreclosure.
What this means is that the first mortgage will get paid first and if there is any money left over then it goes to the second mortgage holder. What this also means is that a second mortgage will have a higher interest rate because of the inherent higher risk of the loan. Read more