Easy Home Equity Loan

In Oregon, I defaulted on both my primary and secondary mortgages on a piece of investment property (not my primary residence). Recently, the first mortgage lender foreclosed on the loan and took the property. Now my secondary mortgage (K) lender is coming after me to negotiate a settlement for payment . My questions are: Are there any additional consequences to one’s credit rating by defaulting on the second that haven’t already occurred by defaulting on the first? And is there a greater risk of law suit or judgment against me on the secondary loan default than the risk that I already have on the first? In other words, since my primary mortgage has defaulted and gone to foreclosure, is there any motivation for to negotiate with the secondary lender?

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What are my tax implications going through this foreclosure? Also am I going to have to pay back the bank for the loss they will incur when they sell the property?

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This is for my primary residence in California.

My first & second mortgage (80/20) purchase money loan are with the same lender.

I never refinanced the first mortgage, but I did refinance the second (HELOC) loan.

I am now considering foreclosure due to financial hardship.

My question is:

1. Does the One Action Rule prevent the lender from seeking a deficiency judgment on the HELOC loan?

2. Based on past trend, for the HELOC which becomes unsecured debt, is there a certain specific percentage that the lender generally settles for with the borrower e.g. a certain most likely percentage of the amount.

Thanks.

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I have two mortgages. The issuer of the 2nd mortgage has filed foreclosure documents. The first has not because I haven’t fallen behind as much with them. On the foreclosure document itself, the 2nd bank refers to itself as "the sole, true and lawful holder of the bond…" and they refer to the county in which the house is located as "possible subordinate lienor". No where does the document make mention of the bank who holds the first mortgage. To make this even more interesting, when I call the bank holding the primary mortgage, THEY THEMSELVES cannot tell that they are the primary lien holders on my house. They keep asking me "who’s holding your first?" Could it have something to do with the fact that both the first and second mortgages are HELOC accounts? Could the issuer of a second mortgage take my house right from under the issuer of the first mortgage? Thanks very much for taking a minute:)

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I have noticed that many many people on here will deny something that is very blatantly true.

or at the very least when cornered, then will try to blame that truth on someone else other than who it belongs.

So lets say for example we say that there is a foreclosure crisis and that it was caused by the government policies that turned a blind eye to regulating mortgages and financial institutions allowing them to make whatever crazy loans they wanted to anyone which of course led to a house boom for which some took credit when it was booming claiming how great of a job they were doing putting new homeowners into houses and how wealthy americans were being able to borrow all that money from the equity in their homes. Things were booming they claimed. But then reality set it, the crash occurred, the bubble burst……and now if you say well there is a major foreclosure crisis due to those policies of deregulation and artificially low interest rates etc…, then the same people who were bragging about the boom will now try to say a) either there is no crisis going on..and its all in your mind, or b) that if there is a crisis going on, it was really caused by the policies of someone who came before them.

This is an example of what I mean by my question. In other words, there is no honesty in political debate..there is no mea culpa…no the buck stops here…no you were right, I was wrong.
I think what I am saying is that some people are purposely dishonest so they can an argument at all cost.

I am just wondering what goes on in their minds, when they know they have to lie to win the argument. How can they believe their policy beliefs are best when they have to lie to win an argument? Or is it that politics is basically just about your own self interest and not the greater good?

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They stated they will probably initate foreclosure can they?

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Here’s our situation. We need to get out of our current house and into one we can both afford and fit into. If it sold today, it would likely pay off the first mortgage, or very very close. But we have a second mortgage that there’s no way it’ll pay off.

The second is with CitiMortgage (who hasn’t been exceedingly helpful at this point), and I’ve asked them to convert it to a unsecured loan os we can sell and get into a house we can afford, and they weren’t sure (well the folks on the phone weren’t sure) if they could do that.

I pointed out to them that currently, they hold zero equity in this house, and if we couldn’t make the payments, they would get zero in foreclosure. Same situation in bankruptcy.

The thing is, we don’t want to just cancel out their portion of the loan, we are willing to pay it back, but just can’t do it right this moment. Foreclosure and Bankruptcy aren’t an option, nor is doing what a lot of Americans are doing and just walking away from a loan we signed for. Unlike most Americans today, we have a little more character than just walking away from a house unless we are literally faced to choose between feeding the kids and paying the second mortgage.

That being said, do you have any ideas how to get them to convert the second mortgage into an unsecured loan at the same terms? It already IS an unsecured loan, because they have no equity. Once this is done, and the lien is released, we can sell, pay off the first, and get into a house we can afford and fit into.
I’m in contact with them, though even the folks in their loss mitigation department didn’t think that it could be done, but we’ll find out. I hear some folks have had success personally contacting the managers and executives involved, giving them a *brief* overview, and asking them if they could help get it resolved.

One thing I’ll note is, these folks probably used to do things like this from time to time, or at least used to work somewhere where they were involved in the dirty day-to-day duties, and they like to feel like they’re still able to make wise decisions in cases like this.

I should add also, I’m willing to have them attach a lien to the new house if they want also, if that’s possible. Though there won’t be any equity to do that.

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Here is my question, I have a primary mortgage that is 0,000 and a second mortgage that is 0,000. I tried to get a loan modification but I was not approved because of the value of the house, only 0,000 now.

My question is, if I keep on paying the primary mortgage and don’t pay the second mortgage what will happen? Can the second mortgage take the house to foreclosure?

I’m trying to negotiate with the second mortgage to reduce the payment, but it doesn’t look like they will.

Any help it would be good.

Thank you

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