Help for Older Homeowners in Foreclosure

Older homeowners in foreclosure have one advantage that others do not. The Older Americans Act of 1965. The Act created the federal Administration on Aging, which in turn funds state Legal Aid offices to assist older Americans with legal issues, including foreclosure.

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What Happens to a Second Mortgage in a Home Foreclosure?

While it can vary greatly from state-to-state, once the lender on a first mortgage forecloses on a property, the lender will sell the first mortgage to the highest bidder in a foreclosure auction sale. The sale proceeds will then be used to pay down any real estate taxes that are due. Once the real estate taxes have been paid, if any proceeds are left, the first loan must be paid, and then the second. If the proceeds from the auction are not enough to cover these debts, several things can happen. If the balances in the first and second loans cannot be paid off, both lenders typically have the right to sue the borrower for balances owed, plus interest and other costs.

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How Home Foreclosure Affects a Renter

When landlords lose properties to foreclosure, tenants are often in trouble. Tenants who get evicted have a few remedies against their former landlords including exercising their rights to “quiet enjoyment” of the property.

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