In trial period for First, but delinquent on second

[Srini]

Hi

I live in Illinois, and my home is currently under water. I had more than 50% reduction in income from the start of the year and have been struggling to make my ends meet.

I qualified for the HAMP program thru WellsFargo (1st mortgage) and into the 2nd month of my trial period.
My 2nd mortgage (with CitiMortgage, taken along with 1st mortgage) is close to 180 days delinquent. The loan rep from Citi calls me and says that If I make a payment now (before the loan is 180 days delinquent), he will be able to say whether I qualify for modification or not, and then if I continue to make payments to keep the loan under 180 days due for the next 2-3 months, he will be able to work on my modification.

What are my options If I successfully complete the trial period with 1st mortgage, but I cannot pay 2nd mortgage. Will he be able to foreclose? or force a shortsale... or what will be the other impacts.

Can the experts let me know.

Thanks
Srini

[Moe Bedard]

Hello and welcome to the community Srini!

I'd be a bit leery of this offer. Often it is just a collector with absolute no authority on your loan modification. The 2nd in not in the best of positions since they may loose it all if the first was to foreclose. You're really in a great position to negotiate something nice with the 2nd.

The 2nd can foreclose, but if they did, they would get nothing. A short sale they don't like for the same reason.

We have seen settlements on 2nds from 5-20 cents on the dollar. Perhaps you approach that route?