What Happens to Second Mortgage After Foreclosure on the First?
Scenario:
I have a foreclosure soon to take place on my first mortgage. What happens to the second mortgage if it is paid up to date? I was so stupid that paid a company XYZ 00 to negotiate a plan for paying the first loan. they promised me that the first mortgage lender would surely accept their plan. But they dropped the ball and the first lender won’t take anything. Now, it’s just 10 days left for the foreclosure sale. The lender is simply trying to blame it on me. Is there anyway I can get back the 00? What’s going to happen when they sell off the home? Will the sheriff come and keep all my possessions if I’m still there in the property? I’m so upset, I could have used the 00 towards the first mortgage instead of paying XYZ. What do you suggest now?
Solution:
Once the first mortgage lender forecloses your property, he will sell it to the highest bidder in the foreclosure auction sale. The sale proceeds will be used to pay down your first loan and then the second. If there is a shortage, and the first lender fails to retrieve the entire first loan balance, he may give you a time period as per the state or bank laws after which you’ll have to vacate the property. There’ll be a date set by the Sheriff on which he’ll come and evict you if at all you don’t move out.
