Are there costs incurred by a second mortgagee when the first mortgagee forecloses?

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Are there costs incurred by a second mortgagee when the first mortgagee forecloses?

I going through a Chapter 7 bankruptcy so I will be relieved of my 1, 2, and 3rd mortgages. My 2nd and 3rd are held by the same bank. If first bank forecloses what cost are incurred by bank holding 2nd and 3rd mortgages? There may be $40K left over after the foreclosure so I’m trying to come up with a number that I can offer the bank who has the 2nd and 3rd mortgages to remove the lien so I can eliminate this debt and stay in my house and just pay the first mortgage.

Asked on November 5, 2010 under Bankruptcy Law, New Jersey

Answers:

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

Answered 10 years ago | Contributor

There are always costs associated with foreclosures and all legal proceedings. I am a little confused by your question.  If you are including your mortgages in the foreclosure you will lose the house and the rights to the house. Are you reaffirming the mortgages? But that would mean that you were intending to pay them.  Are you trying to negotiate the deficiency judgement(s)?  But that may not apply here.  I think that you should sit down with a bankruptcy attorney or a debt counselor to try and figure out what it is you want to do here and really if it is at all possible. It may work out in a different way than you think.  Good luck.


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