1st vs 2nd Mortgage in Georgia with FHA Loan Georgia

[triplesevn]

What is the name of your state? Georgia

hello

I'm looking desperately for an answer to my question.

My wife and I took out a 2nd mortgage thru a sub prime financier, Beneficial, for $29,000. Our main mortgage company owns 200,000 on our home thru a fixed FHA loan.

Both my wife and I suffered medical problems this year causing us to use our savings, 401k, basically everything. We looked for help while our credit scores were good but because we were not behind on anything, we couldn't get it. (Long Story for another time.)

Today, we are two months past due on our 1st mortgage and 4 months on our second. My wife is back to work now and we finally have two incomes again, so that has pleased our 1st mortgage obligation and they are working with us to avoid foreclosure.

But that leaves us with no money left to pay our 2nd mtg, for now. Here lies our dilemma. Our 2nd mtg. says they have the right to foreclose on the house. They say they have every same right as our 1st mtg provider.

We don't understand this or know if it is even true. I called my 1st mtg. but nobody was available to answer the question.

How can my 2nd mtg. foreclose on a 200,000 home over 29 grand, and, why would my 1st mtg allow this to happen when they have far more invested and to lose? How can it be legal for a business to collect 200,000 on a 29 grand loan?

By the way, my 1st mtg is a big company who bought out my orign mtg. So they are not a predatory company or anything like that. They are a very well known company in the US.

Can someone give us an answer to whether this can happen in the state of Georgia, with an FHA loan (FHA's are very restricted and have many rules to them I have been explained)?

Thank you

 

[efflandt]

I don't mean to be mean. But if you used your home as collateral for a loan and you default on that loan, what did you think would happen? They foreclose, unless you can work something out with them.

That is why people suggest NOT transferring unsecured credit card debt to a secured home equity loan or line of credit if there is a chance of not being able to pay it back.

I wouldn't know how much a 2nd lienholder gets when there is a 1st lienholder, but when your home sells at auction, they are hoping to get more than the nothing they are getting now.

If you received any teaser rate offers from your credit cards while your credit was good, that might have been the time to act, especially if you could have gotten a low rate for unlimited time. Now may be too late (they hit you hard when down).

 

[HUD-1]

Second mortgage lender can force a foreclosure. They would have to pay off the first mortgage holder in full if they went that route, or they can wait you out and eventually get paid (with interest, lates fees, attorneys fees and anything else they are entitled to)

 

[triplesevn]

I don't mean to be mean. But if you used your home as collateral for a loan and you default on that loan, what did you think would happen? They foreclose, unless you can work something out with them.

That is why people suggest NOT transferring unsecured credit card debt to a secured home equity loan or line of credit if there is a chance of not being able to pay it back.

I wouldn't know how much a 2nd lienholder gets when there is a 1st lienholder, but when your home sells at auction, they are hoping to get more than the nothing they are getting now.

If you received any teaser rate offers from your credit cards while your credit was good, that might have been the time to act, especially if you could have gotten a low rate for unlimited time. Now may be too late (they hit you hard when down).

No, I appreciate your thoughts. That's why I posted. I understand what we did but medical problems that have kept my wife out of work for nearly a year did us in. When we did the loan, it was for Home Upgrades and we were not expecting the medical issues.

We had a plan as well. We had Investments, 401k, savings, etc; All of which we used.

So, at this point, I'm looking for options. I'm trying to work with my 2nd mtg. lendor but they are threatening me now. I've looked over the paperwork but I don't understand much of the lingo.

I would find it interesting they would buy out my 1st mtg. of over 200,000 for 29,000, especially when we have many homes in my city, area, community that cannot sell or have been foreclosed on already and are sitting empty.

In any case, I'm was just looking for some possible, far fetched idea that they couldn't do it with out my 1st mtg. approval.

Thanks

 

[LindaP777]

Absolutely - 2nd mortgage holder has the right to foreclose. The question is - will they???

In order for them to recoup their $29,000, the house would have to sell at the sheriff's sale for $229,000+ (enough to cover, in order; outstanding property taxes, first mortgage balance and fess, second mortgage balance & fees, etc. The guy at the bottom usually loses out). If they foreclose and the house only gets a $200,000 bid, they will not recoup their money.

It would be in their (2nd mortgage company) best interest to try to work out a repayment plan with you. If they foreclose, they would surely come out short.

I've even seen in foreclosures where the second mortage company does even show up to bid at the sheriff's sale. The knew they would not recoup their money, so they didn't bother trying.

Talk with Beneficial and see if they will work with you.