How often does a lender sell 2nd to a collection agency when 1st is being foreclosed?

Asked by Packard, California Thu Feb 23, 2012

I have 1st and 2nd mortgage with a same mortgage company. I stopped making payment on 1st and I am concerned that lender will sell the 2nd to a collection agency. I am still making payment on the 2nd so it doesnt accrue interest and penalty if they were to sell to a collection agency. If I continue to make minimum payment ont he 2nd until the 1st forecloses, can they still sell the 2nd to a collection agency?

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Sara Mehrpouyan’s answer
Sara Mehrpou…, Agent, Los Angeles, CA
Thu Feb 23, 2012
Hi Packard,

Usually the 2nd gets sent to collections or charged off after either 90-180 days of non-payment. Unfortunately, there is really no way of telling if and when it will happen. I have had some clients that have not paid on their 2nd mortgages for over 6 months and their loan does not get charged off. Sometimes, they may change the servicer of the loan but that does not mean that they are sending it to collections. Please let me know if you have any additional questions as I specialize in Foreclosure & Short Sale. You may consider a short sale. Especially, because you have the California SB 458 law. Feel free to visit my website for more information http://www.Short-Sale-Vs-Foreclosure-Help.com.

Good luck,
Sara Mehrpouyan CDPE
Specializing in Short Sale & Foreclosure
Rodeo Realty
Direct: 818-903-2040
Dre License #01712757
1 vote
Cyndi Lesins…, Agent, Valencia, CA
Sat Apr 7, 2012
I am currently working on obtaining a short sale approval for a client with a 1st and 2nd. Now that the 2nd is over 6 months past due, they are planning on charging it off or selling the loan. This will create a bump in the approval process. We will then start new negotiations with the company that now owns the loan. They gave the seller the option to make a payment to postpone this action. However, the seller doesn't have the cash to do so. Your Realtor will work with the negotiators and coordinate this for you. I am actually in contact with 3 different departments while addressing this situation. I know the post was in February and I am curious what the new status is?
0 votes
Emily Knell, Agent, Huntington Beach, CA
Thu Feb 23, 2012
It would be very helpful to know if your 2nd loan is a Purchase Money note OR if the 2nd is a cashed out equity loan. This WILL matter if you do a short sale & especially if you were to just let the 1st lien holder foreclose.

I would be happy to talk to you some more about the differences.


Shoot me an email directly if you want to talk about this some more. I don't look back on this same Trulia thread for answers posted after mine.

EmilyKnell1@yahoo.com
562-430-3053 c
Realtor Since 1996
Main Street Realtors
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