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Kaatina

2nd foreclosing -private investor

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Hello

 

My 2nd mortgage was done through a private investor in California. We have our first through Ocwen which is current. We originally had our first with Indymac but they sold it to Ocwen. We were able to get modification with Indymac after 2 years and Ocwen upheld it when they bought the loan.

 

Unfortunately, we have been unable to pay the 2nd which is only $750 but, due to lose of my husband employment we are just scrapping by. We have not paid since. January. They started the foreclosure process March 17,2014 and I believe a sale date will be set in a day or so.

 

Our first mortgage has a balance of 558k and it has been appraised by someone we hired for 535k and the county has assessed it at $550k.

 

My question is the 2nd does not want to work with us at all. They are moving forward with the sale date. What could they possible gain from it? One it sells I highly doubt anything will be left for them. They have also asked us to place their address as the new forwarding address after the foreclosure is done. It appears that they want to try and continue with our first mortgage which is at 2% due to the modification. Can they do that? Don't they have to pay the first outright after the sale if no one buys the property with both loans? We are probably going to file chapter 13 as we spoke to a few attorneys last week.

 

Again what could they gain from foreclosing on us? Wouldn't it be beneficial to keep us in the house and work out a payment plan?

 

Any advice?

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How much is the 2nd mortgage? What state do you live in? The second can foreclose, but they'd need to pay the 1st off in the process so doesn't seem like it makes sense for them based on the numbers you've provided.

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Honestly, Let it go. Move to Texas where jobs are plentiful and real estate reasonable.

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My uneducated guesses- I don't have knowledge of CA state foreclosure laws- I guess its a recourse loan then? If so - then I assume once they foreclose and sell for the loss- they can then go after you for the deficiency of their loan. I guess they feel its good money spent - 30 plus thousand dollars to get the deficiency of 147 and then go after you with a judgment. You might want to talk to an lawyer about Chapter 13 or so- if its a recourse state and loan- doesn't sound like they are going away. I think some other 2nds are foreclosing then keeping the house and making it a rental unit or try to strong arm the owners to rent to own plan

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There is no recourse in California and, the junior lien holder is not required to pay off the 1st. They can do "Elective Advances/Protective Advances" to keep the senior lien current after they foreclose on you. It doesn't make financial sense to do so considering the values you've provided but, who said junior lien holders had any financial sense. Perhaps they do want to take advantage of that mod you got on the first and, will foreclose and rent it out or occupy it as their own? Again, there is no recourse in California so, no judgment and no deficiencies are allowed.

 

I suppose that technically the first can call the note due...eventually, as title has changed hands through the foreclosure sale. That's a default event.

 

Also, BK (13) could stop the sale. So could a 7 but, the 7 wouldn't only stall the sale.

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Just a guess, but I think that the problem here can be summed up in 2 words..."private investor". It is extremely unlikely that a bank holding a 2nd in a case like this would even think of foreclosing.

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I just got off the phone with Ocwen and they will not allow them to take over the modification. The terms of the permanent mod were that it would remain owner occupied and it is tailored to our finances. I worked 2years on that mod with Indymac myself. They have asked for the NOD as they were never sent a copy of it. They feel it is suspicious. Like maybe they are just going through the motions and not going to try and take it without the complete process. Didn't even know that was possible. But I am questioning everything Ocwen said because he said 2nd cannot go to trustee sale while we are still active with Ocwen??? I was hoping to solve this without having to file chapter 13 but it seems the only way to stop this.

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