Welcome to Mortgage Foreclosure Guide
Bush Plan For Mortgage Foreclosure Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Second Mortgage Foreclosure vs. a First Mortgage Foreclosure
from:Getting a mortgage is a large step for homeowners. Many make jokes about mortgages and buying their homes calling it "signing their life away". Although it's not quite that serious, taking out a mortgage loan is a huge step. You'll be agreeing to make monthly payments, which include principal and interest, for many years, sometimes up to 30 years. Often by time you've finished paying off your loan, you'll have paid for it two times or more with the interest included.
If the borrower fails to make the scheduled payments on time, they risk losing their home to foreclosure. No one comes out ahead in the foreclosure, not the lender or the borrower. Whether it's a first mortgage foreclosure or a second mortgage foreclosure, it's a big headache for everyone involved. Banks don't like having an REO (Real Estate Owned) on their record and borrowers don't want to lose their home.
In addition to losing their home, they'll have a poor credit rating for many years, which will make it difficult for them to get any credit in the near future. Regardless of whether it's first or second mortgage foreclosure, their credit will be affected the same. You probably understand what a mortgage and mortgage foreclosure is, but many are unfamiliar with second mortgages or second mortgage foreclosure.
An individual buys a home for $100,000 and has a $20,000 down payment. They then take out a mortgage loan for $80,000. We're assuming the home is worth at least $100,000 because banks usually borrow up to 80% of the appraised value of the home. A few years later, the borrower decides to take out a second mortgage. He may be having difficulties making his first mortgage payment and needs cash to be caught up or may also just need extra cash for some expense.
At this time, his home is appraised at $120,000 and his first mortgage loan balance is down to $70,000. He, therefore, has $50,000 of equity to borrow on his home. Following with the 80% rule, he can probably get a second mortgage for up to $40,000. The second lender's name will be on the mortgage under the first mortgage lender because the first has precedence on the loan. Therefore, at this time the borrower owes $70,000 on his first loan and $40,000 on the second loan.
If the borrower cannot make payments on the loans and the loan goes into first mortgage and second mortgage foreclosure, the first lender will get their money before the second. If the home is foreclosed and sold for $100,000, the first lender will get the $70,000 owed to them, with only $30,000 left so the second lender will only get $30,000.
If there is a second mortgage foreclosure but not a first mortgage foreclosure, the second lender may be allowed to make payments to the first lender. Unless it can't be avoided, try to avoid a second mortgage for all concerned.
Bush Plan For Mortgage Foreclosure Specific links
Bush Plan For Mortgage Foreclosure News
Ad attacks Barack Obama health care, tax, debt promises - Allentown Morning Call
Ad attacks Barack Obama health care, tax, debt promises Allentown Morning Call In June 2008 in Raleigh, NC, he says, "We must help the millions of homeowners who are facing foreclosure." To the sound of breaking glass, a narrator says, "Promise broken. One in five mortgages are still under water." Next, Obama appears in a July ... |
FACT CHECK: An honest look at GPS's false claims on Obama's tax plans - iWatch News
FACT CHECK: An honest look at GPS's false claims on Obama's tax plans iWatch News Claims the president broke a promise to help homeowners facing foreclosure, when in fact 5.9 million have received assistance. Gives a somewhat darker picture of the mortgage foreclosure situation than the facts warrant. Exaggerates the number of ... |
Why few homeowners have been rescued - Washington Post
Why few homeowners have been rescued Washington Post When I worked in the Treasury Department, my colleagues and I evaluated hundreds of mortgage modification proposals and started several. At the same time, Congress and several states put in place their own plans. Hope Now. The rate-freeze plan. |
Wonkbook: Will the 2013 debt ceiling be moot? - Washington Post (blog)
Wonkbook: Will the 2013 debt ceiling be moot? Washington Post (blog) By that time, either the Bush tax cuts will have already expired and the automatic spending cuts will have already begun or the parties will have come to some big fiscal deal and the debt ceiling will have been raised along the way. |
Nevada Appeal Candidate Guide: US Senate: Democrats - Nevada Appeal
Nevada Appeal Candidate Guide: US Senate: Democrats Nevada Appeal With one of the highest unemployment and foreclosure rates in the nation, Nevada families are counting on their senators in Washington to be fighting on their side — not on the side of out-of-state Wall Street special interest groups. |