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Second mortgage issues may arise if a homeowner starts to default on their second mortgage and falls behind in payments (or stops making payments altogether). There are a few scenarios that may occur if this happens that would lead to second mortgage issues. If the home still has equity, and the amount that it is worth is greater than what is owed on the first mortgage, then it may be likely that the second mortgage company will initiate a foreclosure on the home. This is because if the home is sold on foreclosure, the second mortgage company will be able to get at least part of its money back. If, however, the home is worth less than the amount owed on the first mortgage, the second mortgage company may not issue a foreclosure because all of the money from the sale would go to the first lender and not the second.
In some cases, the second mortgage company may not take any action on the delinquent homeowner because it is not worth their time or money to pursue legal action. This is especially likely if the homeowner has declared bankruptcy. However, if the mortgage company believes it can retrieve some of its money back from the homeowner, then second mortgage issues are likely to arise.
When a second mortgage company decides it can collect on the homeowner, it can begin a lawsuit and sue the homeowner for what is owed to them. If the mortgage company wins the lawsuit, it will get a money judgment against the homeowner, meaning that it can take various routes to recover their owed funds from the homeowner. For example, the lender may get a judgment lien against other property or real estate that the homeowner owns. This means they can foreclose the homeowner's other real estate and/or repossess anything of value they may own (car, jewelry, art, equipment, etc.). The second lender can also garnish the homeowner's wages (take a percentage of every income payment for a certain amount of time). In addition, they can levy the homeowner's bank account(s) and remove the funds to pay back the loan. Any of these second mortgage issues can wipe out a homeowner, putting them in severe financial danger.
There are certain restrictions and limits on what a mortgage lender can take from you if you default on your second mortgage. An experienced real estate lawyer can assist in protecting your rights. If a collection agency or lender is threatening you for any second mortgage issues, a lawyer can be there to protect and defend your assets. It may be necessary to declare bankruptcy so that the mortgage company cannot come after any of your assets. A qualified lawyer will walk you through this process and file bankruptcy for you if need be. If that is not an option for you, an attorney can help you explore other options, such as settling on a repayment plan or other agreement with the second mortgage lender.
If you are having any second mortgage issues, contact a real estate lawyer today. Attorney Search Network can help you find a real estate lawyer in your area that can help you take steps towards solving your second mortgage issues.
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