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If your first mortgage takes a deed in lieu, what happens to the second mortgage?
Do the 2 companies duke it out? Or does the former homeowner have to strike a deal with the company that held the second mortgage?
3 Answers
- LandlordLv 71 decade agoFavorite Answer
The second will follow you out. The first does not "duke it out", you simply have to continue paying the second.
- Spock (rhp)Lv 71 decade ago
without reading the paperwork, or knowing which state this is in, my bet is that the terms of your second mortgage prohibit this without their consent.
it may be that the second mortgage company would then have the option to buy out the first and thus take the house. They also might have the option to immediately sue you for the amount owed.
are you also planning to file for bankruptcy? you might need a BK attorney before this is over.
Source(s): experience - Anonymous1 decade ago
1st takes ownership. 2nd becomes unsecured, and theoretically can sue the debtor for the deficiency.
