private equity investors
Question
If I am current on my 1st mortgage loan but default on my 2nd loan ..can the 2nd lienholder foreclose on my ..?
home? The 1st mortgage is current I owe them $250k. The property value is only $215k. The 2nd lienholder are "private investors"; and they have sent me a trustee sale notice which has no opening bid. I matched the recorders office instrument # and it belongs to another property which is not even my property! to me it seems like they are faking the notice of trustee sale becuase it is not recorded? I have been getting advice out there and Ive been told I can file a bankrupty ch13. What to do ? help? Can they foreclose even though my 1st mortgage is being payed current ? and plus there is no equity? ps I stopped paying because I couldt afford to pay these private investors anymore an interest rate of 13%. also the property is in California, LA county
6 months ago - 4 answers
Best Answer
Chosen by Asker
If the debt is properly secured against your home, then they can foreclose IF and only if they pay off the 1st mortgage when they do so. Nobody is going to pay off the $250,000 mortgage to take a $215,000 house. They are better off holding the debt and letting the 13% interest accrue so they can sue you for it later. So no, they won't foreclose, although they technically could. If you had tons of equity, you might have a reason to be worried. For example if you only owed $100,000 on the 1st mortgage, the investors might find a way to come up with the $100k to pay off your first mortgage so they could foreclose and take your equity.
by SmartA$$
6 months ago
Asker's Rating: 
Other Answers
No they cannot foreclose but they can and will put a lien on your property. Your 1st Mortgage holder will not like that and could call your loan. Meaning you would have to pay in full immediately. You need to read your loan papers from the 1st mortgage company.
by sassy2- 6 months ago
My best advise to you is see an Attorney that is a Bankruptcy specialist they will direct you gladly.
by Big Deal Maker- 6 months ago
Yes, the second can foreclose. In fact, ANY lienholder may foreclose, whether its a mechanics lien, or a judgment lien, or a HOA assessment lien, etc. However, in your case, the second would be foolish to foreclose. Their foreclosure would not extinguish the 1st mortgage. So, nobody at the trustee sale would buy, because they would be buying a property that is encumbered with a $250K debt. The holders of the second mortgage, if they indeed foreclose, will, after all the time and expense of a foreclosure, will end up owning a property worth $215K and encumbered with a $250K debt. However, that second mortgage is not going to go away. Eventually, yo will pay down your first mortage, or else your home will go up enough in value, to the point where the second lienholder WILL find it advantageous to foreclose. At that point, when you receive the default notice, you will be required to pay ALL of the arrears due to the second lienholder if you want to avoid the foreclosure. At this point, your best bet may be to stop paying both the first and second. See an attorney to learn the ramifications of such a plan.
by Mr Placid- 6 months ago