What Happen to 1st Mortgage when 2nd Mortgage Foreclosures

by staffwriter on September 25, 2010

When there are two mortgages on your home, you obviously want to be very careful about making payments on time seeing as no one wants to deal with foreclosures. In a situation where there are two mortgages on a home it is possible for a foreclosure to take place if you become delinquent on your second mortgage. The second mortgage lender can legally decide to foreclose on your home and/or property if you become delinquent on payments.

Generally lenders do not like to foreclose, and if you are willing to work with lenders they will try to come up with a payment plan for you. If a lender is convinced that you are unable to pay the mortgage due to financial hardships they may offer a lump-sum settlement. It is sometimes possible to pay as little as 10 to 30 cents on the dollar to some lenders, but it is solely based on the company and lender you are dealing with.

It is sometimes possible to workout a forbearance plan with companies which would entail paying a reduced payment or suspending payment for a limited time which usually lasts at most up to 18 months. Another option that should be considered before reaching the point of foreclosure would be refinancing mortgages. Refinancing mortgages is one of the best solutions possible and quite common. According to Homethinking Mortgage Research website a little over half of their business deals with refinancing loans.

Always remember to workout plans so that you do not have to deal with foreclosure, but if there is a financial situation that you may need help with being up front and honest with lenders is the best option.

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