Foreclosure in Scottsdale>Question Details

Cc, Home Owner in Scottsdale, AZ

My original question: Can a second mortgage foreclose on a property if the first mortgage is in the modification process?

Asked by Cc, Scottsdale, AZ Sat Nov 6, 2010

The home does have equity in it and the modification was through the HAMP program. The three month trial was completed and we have been approved for the modification. Thank you for the answers to the original question that I asked.

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James Wehner’s answer
Congratulations on your successful loan modification. If you didn't do so already, I would make sure to contact the trustee to confirm the foreclose process has been cancelled with the 2nd.

James Wehner
John Hall & Associates
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0 votes Thank Flag Link Sun Nov 7, 2010
Yes the 2nd can foreclose while you are negotiating with the first. The HOA can also foreclose and so can the local tax authority all while you are trying to negotiate with the first mortgage company.
0 votes Thank Flag Link Sat Nov 6, 2010
OK then the second has a lot of power you better get an attorney

Good Luck
Bob Patrick
By a home after foreclosure expert
0 votes Thank Flag Link Sat Nov 6, 2010
Bottom line - yes the second can foreclose. What bank is it? A bank bound by the HAMP / 2MP would be easier to stop by submitting them a mod application. A credit union loan 2nd that is in default will gladly take this opportunity to improve their situation and buy out the 1st. DSFCU does it all the time.
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0 votes Thank Flag Link Sat Nov 6, 2010
I just talked to a paralegal about this and was told no since the first is a government loan and by law the second must put their foreclosure on hold until the modification on the first is complete. Then the second must buyout the first in order to foreclose. I would seek legal advice through a real estate attorney.
0 votes Thank Flag Link Sat Nov 6, 2010
The answer is yes they can.
The question is will they? It depends on the specific facts of your situation..
Seek help from a real estate attorney for you specific circumstances.
With out a thorough analysis, we shouldn't even hazard a guess. It would be a disservice to you.
0 votes Thank Flag Link Sat Nov 6, 2010
When Will a Second Mortgage Loan Foreclose?
In the current real estate market a second mortgage loan, whether a purchase money loan or a non-purchase money loan such as a HELOC, will never foreclose. The reasons are that, one, the second mortgage lender may then have to pay off the first mortgage loan or lose the property to foreclosure; two, there is generally no equity in most homes subject to foreclosure in this current real estate market; and, three, the second mortgage lender would not be able to pursue any deficiency claim against the owner of the home after the foreclosure. (In prior “boom” years, however, a second mortgage lender would occasionally foreclose on the home, and try to “flip” the home quickly to make a profit before the first mortgage loan foreclosed.)
This was answered via Chris Combs web site.
Good Luck CC!
0 votes Thank Flag Link Sat Nov 6, 2010
I agree that you should talk to a real estate attorney that can help with your specific situation.
0 votes Thank Flag Link Sat Nov 6, 2010
Try getting in touch with Christopher Combs of the Combs law group. Great Arizona Real Estate Attorney. Should be able to google him very easy.
0 votes Thank Flag Link Sat Nov 6, 2010
Paul has it. Your question is a legal one for that specific situation. If you are paying on a first but not your second your second could foreclose if its in the remedy of the loan agreement for non payment but you do need to have a real estate atty review and fight your case if you have one. Seek counsel right away.
Best of luck
Laura Myers
Keller Williams
0 votes Thank Flag Link Sat Nov 6, 2010
I read through the answers to your initial question, and the responses were largely spot on. At this point, however, with the question shifting from a general one to one very specific to your unique circumstances, I strongly recommend you eschew the opinions of the Realtors, mortgage lenders, etc on this site for proper legal advice from a Real Estate attorney. We all have opinions, but they won't be rooted in a comprehensive understanding of case law. Good luck.
0 votes Thank Flag Link Sat Nov 6, 2010
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