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Mortgage Refinance Foreclosure Article
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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.
Mortgage Refinance Foreclosure Specific links
Mortgage Refinance Foreclosure News
Realtors(R) Offer Support for Bill to Help Responsible Homeowners Refinance - MarketWatch (press release)
 WRAL.com | Realtors(R) Offer Support for Bill to Help Responsible Homeowners Refinance MarketWatch (press release) Refinancing into more affordable mortgages will also go a long way to helping homeowners avoid foreclosure and aid in the recovery of Fannie Mae and Freddie Mac, he said. Veissi said that while Fannie Mae and Freddie Mac have recently made improvements ... Mortgage rates hit 4th straight record low Freddie Mac: Housing market showing recovery |
Mortgage Relief – Without the Catch - Politic365
Mortgage Relief – Without the Catch Politic365 Then you were beat with disbelief when you realized to qualify you had to be current on your your mortgage payments, have a credit score of 580 or above AND pay a high enough interest rate to make refinance a worthwhile option. |
Malloy Announces Plan For CT's Share Of Foreclosure Settlement - Patch.com
 Mortgage Rates & Trends | Malloy Announces Plan For CT's Share Of Foreclosure Settlement Patch.com The settlement, which was announced on February, will provide an estimated $119 million in loan modification and refinancing relief to the state's homeowners, an estimated $7.3 million to foreclosure victims and $28.1 million in payments to the state ... Allocation of Mortgage Settlement Funds Malloy, AG announce allocation of mortgage foreclosure settlement funds Settlement dollars fund TN mortgage assistance |
BofA May Turn Profit on Mortgage Buybacks, Credit Suisse Says - Bloomberg
 Bloomberg | BofA May Turn Profit on Mortgage Buybacks, Credit Suisse Says Bloomberg Under Freddie Mac's rules, mortgage servicers typically must buy loans out of bonds while retaining the firm's guarantees once borrowers fall more than 120 days behind to rework debt or manage foreclosures. Homeowner credit scores for the loans that ... |
Despite Home Value Gains, Underwater Homeowners Owe $1.2 Trillion More than ... - MarketWatch (press release)
 Sun-Sentinel (blog) | Despite Home Value Gains, Underwater Homeowners Owe $1.2 Trillion More than ... MarketWatch (press release) That is nearly one-third (31.4 percent) of US homeowners with mortgages, compared to 31.1 percent in the fourth quarter of 2011. - Foreclosure is not imminent for most underwater homeowners. Nine out of 10 continue to make their mortgage and home loan ... Zillow: Underwater mortgages still plague Broward, PB counties Underwater Nation: 16 Million Borrowers Owe More on House Than It's Worth |