2nd Mortgage settlement help


LoanSafe Member
Mar 20, 2018
Hi, I've received authorization to negotiate on behalf of my aunt to settle her second mortgage back in Nov 2017. Negotiations are a bit rough, I've got my first offer from them back in early January and have not replied since getting it. Offer expired in Feb 24.

Expired Offer:

Current house value: $831,743
1st Mortgage: $490,000
2nd Mortgage: $174,910

Pay off 2nd mortgage at 99%: $173,178

Reading through your help topics, I understand the house is way above water. She has never missed a payment on her 1st mortgage but never paid anything for her 2nd mortgage. Her 2nd mortgage was created in 2008 and I believe was sold to RealTimeResolutions sometime in Oct 2016 based on the late fees. The house is in California. I've mistakenly given some financial info provided to me such as tax info over the phone but not through paper.

I am unsure how to proceed with this as I don't think they will be willing to negotiate. I am unsure how SOL works exactly either. Can anyone help me out on how I should attempt to settle with them?


LoanSafe Member
Mar 19, 2018
We purchased a house in 2007. The first lender gave $240,000 @ 6.5% (interest only) and the second lender gave $60,000 @ 9% conventional loan. During 2010 the first mortgage was modified and we are current on it till date. The remaining balance is $ 200,000.
The second lender did not modify the loan giving the reason of our low income. With our best of efforts the second was not modified and we are not paying since 2010. Now the total balance is $ 100,000 which includes principal, interest and penalties.
Both mortgages have different title companies. Recently we have received an intimation from the second lender about the amount due. The second lender says In case the amount is not paid, it will go for foreclosure. Being in California and being current with the first lender, is it possible for the second lender to go in for foreclosure? If yes, what is the best option to resolve the issue?
Our financial state is very poor and we are not able to pay anything. We want to retain the house. Please advise.

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
San Diego, California
Have we spoken? Your scenario sounds all very familiar with someone that I've spoken to recently. Also this has been a hot topic recently and I want to make sure that I mention something that I have been able to accomplish, it may or may not help depending on the situation.

Client had 2nd lien CHARGED OFF, More than 4 years ago
*Note to above: I have had situations where borrowers did not have charge-offs that hinder our ability as it is considered an active derogatory item even if it has been closed.
Home Value: 400,000
1st Lien: 280,000
2nd lien: 120,000 (however accepted a 90K settlement)

We were able to obtain a payoff in the amount of 90K, refinance this borrower via a cash out refinance because they were beyond the 4 year requirement and pay off that 2nd lien at 90K (not 120) and give them a whole new 1st mortgage. Then in 6 months we're going to go for a rate & term refinance to get the interest rate even lower (cash out refinances come with slightly higher terms).

I'm not sure if this is a situation you are in or again if we have already spoken but it's an option if there is that pesky 2nd lien holder trying to foreclose.

For Rocksy,
Your 2nd lender can initiate foreclosure however they would have to get the 1st mortgage to agree to pursue it as well as pay them off. It's unlikely for it to happen but if you have a significant amount of equity it's always a possibility.
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