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what to do about the second? - Posted by Dale
Posted by Dale on August 11, 2004 at 18:42:20:
If a homeowner has taken out a HELOC at an outrages 18%. Still owes 10,000 on it. But now can’t afford the payment. What happens? Can the bank that gave out that second loan foreclose on the house? when there is a first loan, that has never missed a payment? Can that other bank(the second loan) foreclose on a $95,000 house for a $10,000 loan if the owner defaults on it? or is there a way to get rid of the second loan. The first loan and the second are two seperate banks. thanks
Re: what to do about the second? - Posted by Dale
Posted by Dale on August 11, 2004 at 22:04:19:
Ok, her credit is a wreck because of this default and taking on this debt. Now, what happens to the FIRST? do they get sccrewed out of the loan? It does not seem right for a 10,000 debt to over ride a 95,000 loan yhat has been made good all this time. Also, if the SECOND does foreclose. They take the house? For 10 grand? Oh, there is no way she can afford to pay this second off at this rate. Is there any recourse? This girls ex husband pushed her into taking the loan out and when it came time to pay for it, he left her and the debt. (i know this is no excuse) thanks in advance
Re: what to do about the second? - Posted by Kristine-CA
Posted by Kristine-CA on August 11, 2004 at 21:20:14:
Find a way to make the payments or a payment arrangement on the HELOC. 2nds can and do foreclose, doesn’t matter what the amount is. Kristine
Re: what to do about the second? - Posted by Bill H
Posted by Bill H on August 11, 2004 at 20:07:37:
You asked:
If a homeowner has taken out a HELOC at an outrages 18%. Still owes 10,000 on it. But now can’t afford the payment. What happens? Can the bank that gave out that second loan foreclose on the house?
YES, they have every right to protect their position and the TD most likely has a provision for power of sale.
when there is a first loan, that has never missed a payment? Can that other bank(the second loan) foreclose on a $95,000 house for a $10,000 loan if the owner defaults on it? or is there a way to get rid of the second loan.
YES, pay if off or refinance it into the first.
The first loan and the second are two seperate banks.
Very common occurrence…makes not difference…both lenders are entitled to protect their investment.
Bottom Line:
You (or somebody) made the debt…if you cannot pay it…the can foreclose.
Good Luck,
Bill H
Re: what to do about the second? - Posted by Tom-FL
Posted by Tom-FL on August 12, 2004 at 18:15:15:
– Also, if the SECOND does foreclose. They take the house? For 10 grand? –
Yes. What is so odd about that? If you pledge your house as security for the repayment of five dollar value meal, then you’d better pay it off. When the bank slides that contract under your nose saying you are pledging the house, it’s NOT with the intention of saying “just kidding” when you stop paying. Nope, they are serious and they will take what you have pledged.
– It does not seem right for a 10,000 debt to over ride a 95,000 loan yhat has been made good all this time. –
The second doesn’t “override” the first, the first gets paid at the sheriff sale just as the second does. The minimum bid will be $105,000 (95,000 + 10,000) and if no one bids higher, then the second takes possession. If someone goes higher, then the high bidder takes possession and the amount over $105,000 goes to the foreclosed owner.
Re: what to do about the second? - Posted by B.L.Renfrow
Posted by B.L.Renfrow on August 11, 2004 at 23:55:14:
The first won’t get screwed out of anything. The foreclosing second will either pay off the first or bring it current and continue to make the payments.
Yes, if the second forecloses, they will indeed “take the house” - subject to the existing senior lien(s). Ten grand, five grand, a hundred grand, whatever…that’s how it works.
Her recourse is to find a way to pay off the second (as in, selling the property) or bring it current, work out payment arrangements with the lender, file bankruptcy, or get foreclosed on.
The lender won’t give one whit about the ex-husband and what he did or didn’t do. If the “her” to whom you refer signed for the loan, she’s just as responsible as he is. That’s the whole idea of having a security instrument - so the lender has recourse in the event they aren’t paid.
Brian (NY)