After foreclosure, what are options for 2nd mortgage overage (purchase money) that won’t be paid back?
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If a home forecloses (value decrease) аnd thе second mortgage wіll nοt bе fully satisifed bу thе auction sale οf thе home, thеn thе 2nd mortgage holder MAY (sometimes thеу don’t) take one tο court аnd file a judgement. Mу qυеѕtіοn іѕ, whаt аrе thе options fοr dealing wіth thіѕ? Chapter 7 I know уου саn, bυt whаt аbουt Chapter 13? Wіll thаt bе acceptable fοr a lien thаt mіght bе anywhere frοm 50-100K? Anу legal advice wουld bе grеаt, іt’s fοr a friend.
Related posts:
- Does a first mortgage get paid off completely before a second mortgage gets any money?
- Can the mortgage company come after me after my co-owner files for bankruptcy on the home?
- What happens to the second mortgage when the first mortgage forecloses?
- If past due mortgage amount is paid, does foreclosure stop?
- When a house goes into forecloseure, which mortgage gets paid off first, the second or first?
Tagged with: Foreclosure • Money • mortgage • Options • overage
Filed under: Foreclosure
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Hi, howya doin. The options for dealing with the judgment that the 2nd mortgage holder has, in chapter13 of consumer bankruptcy, is for your lawyer to make, what in NYS we call a “Pond motion”.
This means the lawyer asks the court to recognize that the mortgage debt is way out of proportion to the value of the house, and (while the debtor works out payments for the arrears and foregoing first mortgage payments through the Chapter 13 plan)the Court makes the second mortgage into another unsecured creditor (meaning they no longer have a stake in the house) and then, as an unsecured creditor, they get whatever proportion of debt repayment the other unsecured creditors get (could be 10%, could be 100%, depending on your plan). I don’t know how much you know about bankruptcy.
In a Chapter 7 its a bit more complicated, depending on whether you want to keep the house or not, and then the homestead exemption comes into play. Contact me if you have more questions, through yahoo or call a bankruptcy lawyer.