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

[Evan Bedard]

Hi Armsli welcome and thank you for joining the forum.

Yes a 2nd lien holder does have the right to foreclose but usually the 2nd will not because if they do, the first has the first right to collect their money and the 2nd would get nothing if you are underwater.

Have you already attempted to modify your second mortgage or possibly even settling the loan for about 5-10 percent of whet is owed?

[armsli]

Hi Evan,

Thanks so much for your response.

The second mortgage is through a special Pa. program for families who need septic systems, and is funded through Pa. Housing and Infrastructure. It's already at a 1% interest rate, and I hated getting behind in the first place. I'm still trying to catch up with payments, which are only two and a half months behind, but they are really agressive in their collection efforts. I just talked to them for the first time today and was taken aback at their threat of foreclosure.

Since our house value is currently less than our first morgage, I thought it unlikely that they actually would foreclose. Also, though, I don't want to hurt my chances of permanent modification during my three month trial. Just not sure how to approach them. I told them I could make a payment next week, but their' insisting on all three months past due by the end of the month.

Thanks again,
Lisa

[Evan Bedard]

Since our house value is currently less than our first morgage, I thought it unlikely that they actually would foreclose. Also, though, I don't want to hurt my chances of permanent modification during my three month trial. Just not sure how to approach them. I told them I could make a payment next week, but their' insisting on all three months past due by the end of the month.

They always will tell you at first that you need to pay all your deliquent amount right away. The key is to keep calling and calling until you get someone on the phone who is actually willing to help. Request to speak with manangers and supervisors as well because many times they seem much more professional.

[Martae007]

Evan Bedard, GOD BLESS YOU for having this forum.

Lisa, I've been told the same from my lender who has been working on my mod package since April. Now is it asking too much for the lenders of the second mortgages to just do a forebearance for the missed payments, cut the current payment by 60% and do a simple mod to at least get most of the monies back for the investor. Is this asking too much!!!!! Homecomings Financial did this for me back in April without me having to supply any docs. Now this is a lender! Meanwhile, I've submitted over 300 pages to Chase and they are still asking me for additional docs. My god, this is only a SFR which I paid 420,000.00. We are not talking about my purchase of the Ritz Carlton!!!!!