There are many homeowners out there who not only have one mortgage loan. Many borrowers over time take out some kind of second mortgage loan, whether it be a home equity loan or a traditional second mortgage. These loans tend to be much smaller than the first mortgage and a smaller monthly payment as well.
Due to the this economic crisis many borrowers are starting to default on their mortgage payments. Most people believe that by only paying the first mortgage but not there second they may be able to avoid foreclosure.
This is not true.
Your second mortgage holder is allowed to initiate foreclosure proceedings even if the borrower is up to date on their first mortgage. Just like your original first loan, the second is secured and can be repaid by the value of your home. One problem with the second lender foreclosing is that the original mortgage will be the first to collect on the foreclosure proceedings.
This is one major reason why second mortgage holders choose to take their time when it comes to foreclosing on a property. Especially today with the market values on homes lower then ever before, the second is unlikely to collect a cent.
But do not stop making you second mortgage monthly payments because there is always a chance the lender may choose to foreclose on your home. Even if your home’s value is well below of what you owe. If you have already begun missing payments on your second mortgage I would strongly suggest to start seeking a solution, such as a loan modification.
My name is Maurice “Moe” Bedard. I am the founder of America’s #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.