Second lienholder forcing foreclosure?

[armsli]

Hi,

My husband and I have fallen greatly behind our mortgage since his business closed. After spending money on a loan mod company who did nothing, we finally were approved for the MHA plan by our lender, BOA. Our docs should be here shortly.

The question I have is this: We have a second lien on our property from Pa. Housing and Finance in the amount of $24,000. It is a special Pennvest loan which we took out last year for a new septic system. It was a special loan which we were lucky to get, as our septic system failed and we could have been forced to leave our house if we didn't install a new one.

We have tried to stay current with this loan payment, but ended up slipping behind three months. We just got a letter from them saying if it's not made current by the end of the month they will force a foreclosure, as is their right.

Can they really do this? Would they? Our house is valued at less than our mortgage at this point. Can a second lienholder really force a foreclosure, and does the first lienholder have any say? I am really trying to come up with the money, but now I'm scared.

If anyone can offer any advice, I would really appreciate it. We have a bankruptcy attorney, but she's not returning my calls. We put the BK on the back burner for five months pending our modification issue.

Thanks so much,
lisa

[Moe Bedard]

Hello,

This is common to hear these types of threats that have merit but no backbone. Basically, the 2nd is not in a good position at all and sometimes they may use your fear and you having no knowledges as a tool to scare you in order to get their money. Often they do.

Think of this like a game of poker and you are all at the table now. The 1st, the 2nd and you. The facts are that without you the 2nd gets nada and the 1st may get the shaft also. So it is in both their bets interests to work some type of deal out with you.

I have seen 2nds settle at 5-10 cents on the dollar and have also seen them wiped out in bankruptcy. That is something that an attorney will most likely have to handle or you will have to get real educated and negotiate this yourself. I haven't seen any non profits do this.