Here is fresh one for you. Iâ€™m in Houston and this popped right up when I searched on the subject.
I went through a loan modification d was able to save the 1â€™st and & got a great new deal with Wells Fargo. But just about all the equity was wiped out (didnâ€™t pay the mortgage for a long while).
My home is appraised for $128K, the new 1â€™st is now for $127K. So basically no equity.
The 2â€™nd was a home equity loan for only 16K that I took out before I got into trouble.
I had that one with Wells as well but they wrote it off and sold it 2 years ago.
A few months ago, an investment group bought the bad loan and was represented by a management / collection company and started making threats.
I blew it off for 4 months thinking that sense there was no equity, Iâ€™m now in good standing on the 1â€™st, so nobody was going to move forward with anything. Just didnâ€™t make sense.
But, they didâ€¦.start the process anyway.
In Texas, the 2â€™nd lien holder (bank or investor who bought the bad debt) has to get persimmon from a Civil Judge to foreclose and to put your house on the auction block, and I got served that they were doing just that.
I spoke with a couple of lawyers and basically the 2â€™nd lien holder can force the sale of the home, but who ever buys it must settle the 1â€™st.
I had always thought the 1â€™st would have to be paid off before they could do anything. Not the case. They can force a sale for your house w/ the 1â€™st attached and who knows what could happen.
Depends on how much equity you have but who knows what could happen if your house (w/ the 1â€™st) is sold as a package at auction.
So even with no equity, somebody could buy it at auction, pay off the 1â€™st, and toss me out. Once they have court permission to do so. Despite the fact the buyer would lose thousands. (In my case)
All the same, not worth the risk. I worked out a decent deal with the 2â€™nd lien holder.
Soâ€¦.. Yes they can â€œforecloseâ€ via forcing a county auction sale no matter what the deal is on your first. They might want Joe blow to buy the whole package or they might want to buy it. Either case, who knows what could happen.