What to do if my 2nd mortgage holderis suing me although my 1stmortgage has been modified?

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What to do if my 2nd mortgage holderis suing me although my 1stmortgage has been modified?

I fell behind on my mortgage. The 1st was modified through the Obama plan, but now the company that bought the 2nd is suing me for the note amount, plus interest and fees. If they chose to be nasty, could they foreclose and could I lose my home?

Asked on March 18, 2011 under Real Estate Law, Texas

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Why the second mortgage was not rolled in to the modification in some way if it could be is beyond me.  In other words, they should have been addressed at the same time.  You need to seek legal help her and someone needs to read all your documentation - first and second mortgage notes.  A second mortgagtor ia known as a "junior lienholder" and they can foreclose, but the property would be subject to all "superior liens". Tax liens, for example, are always superior. So, when a first lienholder forecloses, he gets the property subject to any tax liens. If a second mortgagee foreclosed for non-payment, he would own the property with the first lien still in place and have to pay it plus the taxes. What worries me is that the foreclosure might also trigger acceleration of your first lien note making the whole balance due. You would have to read the note for the first lien to see what consequences there might be.  Get help.  Good luck.


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