Where does negative equity leave a not current 2nd mortgage?

Mar

Where does negative equity leave a not current 2nd mortgage?

Archived in the category: 2nd mortgages

Home has $16,000 in negative equity regarding the 1st mortgage which we have current. Where does that leave our 2nd mortgage which is not current due to loss of job?

Totally in the negative—no equity.
A 2nd mortgage is subordinant to the first.
Doesn’t matter why it is not current, it is, and it will affect your credit. If they go to foreclose on it, then your first lender may take action.

Go to HUD approved credit counselor to learn your options. Talk with lender about loan modification, loan forbearance, and the new Obama Help for Home owners program. Keep calling and speak with more than one person at lender.

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3 comments for “Where does negative equity leave a not current 2nd mortgage?”

chatsplas

Totally in the negative—no equity.
A 2nd mortgage is subordinant to the first.
Doesn’t matter why it is not current, it is, and it will affect your credit. If they go to foreclose on it, then your first lender may take action.

March 7th, 2010 at 1:49 am

Steve D

One does not have negative equity on just one mortgage – to determine your negative equity, add your 1st and 2nd mortgages together and then subtract your houses value – that is your negative equity. If you are past due on the second mortgage, they can foreclose at any time – the only difference between your first and second is the order in which they get paid from receipts from selling the house. Since you are negative beyond what is owed on the first, my guess is that the second may let you slide for a while since they would be looking at taking a total loss on the balance. They will continue to tack on interest until either you start paying them or until a combination of payments on the first mortgage plus any possible appreciation makes the home worth more than the balance on the first mortgage as of which time, a foreclosure would get them some of their money back.
References :

March 7th, 2010 at 2:03 am

Joann 50 St loan officer

It depends on what you are trying to do. Almost everyone is upside down on their home value. But, with the new law that Pres. Obama put in place they can still refi.
With being behind and having a job loss you can qualify for a loan modification.
References :
My source is that I am a 50 state loan officer able to do residential & commercial loans, loan modifications and more!

March 7th, 2010 at 2:40 am

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