| iv> | | | | However, lenders of second mortgage will only |
| Do you know the so-called secret behind the second | | | | foreclose your property if it has a sizeable equity and |
| mortgage? Lenders are hiding the fact that you have | | | | the proceeding would be economically sensible. |
| much leverage on this kind of loan. This is the dirty | | | | If they foreclose your property, the lenders will have to |
| secret behind second mortgage that you need to | | | | pay the first mortgage and other costs associated |
| know. The secret is that a second mortgage | | | | with it. In most cases, there will be nothing left for the |
| always falls behind the first mortgage. So in case of | | | | second mortgage lender to make a profit. Basically, |
| foreclosure or short sale, the first mortgage must be | | | | the second mortgage will be left with no protection |
| satisfied in full first before the second mortgage can | | | | and collection is unenforceable just like credit card |
| get a dime. In most cases, the second mortgage will | | | | debts. This is the reason why you can have much |
| be sold off as a total loss and is wiped out. | | | | leverage on the lender with the second mortgage loan. |
| Capitalizing Your Leverage | | | | |
| There are lots of homeowners who usually fall behind | | | | What You Can Do |
| on their payments for the second mortgage. If this is | | | | Trends in the past 12 to 18 months show that lenders |
| your case, you will naturally call your servicer and will | | | | of second mortgage will only hold the loan if it is 6 |
| tell him about the situation. | | | | months behind. They will then treat this loan as a |
| You will be surprised that your second mortgage | | | | charge off. It means the debt is already uncollectible. |
| lender will quickly give you a loan modification offer. | | | | Lenders usually sell this loan to a debt buyer. If this |
| This modification plan will lower your monthly | | | | happens, the second mortgage will not be attached to |
| payments so that you can keep up and allow you to | | | | your home anymore. What this means is that your |
| remain current. Unfortunately, most modification plans | | | | home can not be foreclosed anymore. |
| are not the best offers that you can get and they can | | | | The loan will still show in your credit report until |
| not usually offer long term relief. As a trouble | | | | payment in full has been made. But you can easily |
| homeowner, you might accept this plan gratefully and | | | | negotiate for a settlement or you can get an equity |
| begin payments. However, you don’t realize | | | | loan with a very low interest rate. |
| that you have just settled for less because you did not | | | | You can enjoy plenty of leverage with a second |
| use your leverage on this type of loan. | | | | mortgage. Do not worry if you fall behind the |
| Second mortgage lenders have the capability to | | | | payments because there are lots of options available |
| foreclosure on your property if payments are behind | | | | for you. You can easily settle or modify this loan to |
| for over ninety days. This is specifically written in the | | | | reduce the balance and keep the loan current. |
| second mortgage contract that you have signed. | | | | |