More Than One Mortgage In The Foreclosure Process By Nick Adama "When it rains, it pours." Homeowners with more than one mortgage who have fallen behind on all of them know that old cliche possibly more than anyone else. When a financial hardship comes up, and there is not enough income to make all of the mortgage payments, more than one of the lenders may initiate foreclosure proceedings in the county court at roughly the same time. In fact, if one starts the process of filing paperwork in the court system, all of the others may also file as soon as they are aware of the first foreclosure, and that the homeowners are behind on all of their bills. This situation can be somewhat confusing for homeowners, though, if the second mortgage files first, followed by the first; or the HELOC holder filing first, followed by the first and then the second.
But, to put it in as simple terms as possible, filing foreclosure is simply one creditor, who has had the house pledged as collateral for a mortgage loan, asking the appropriate local court to sell the house, in order for the mortgage company to regain any losses experienced on the nonpayment of the loan. The fact that more than one lender is claiming losses at once, when all of the lenders are behind on payments, should not be surprising at all.
It will be the court itself that orders the sheriff sale of the property, as long as the plaintiff in the case, the bank, can prove that the loan is in default and that the property is collateral. This, of course, is usually quite easy to prove, and, far too often, homeowners do not even make an appearance at the foreclosure hearing to make an answer or request more solutions outside of the legal foreclosure process. However, in any case, it does not matter if one mortgage company or lienholder files foreclosure paperwork first or second, as the proceeds from the eventual foreclosure auction will be paid out the same way. The order of payments is determined far in advance, even before the house is sold to the foreclosure victims to begin with.
At the sheriff sale, any back property taxes will be paid off first. Then, the first recorded mortgage will be paid off. After that, any other parties will be paid off in order of when their lien was filed with the county recorder. The only exception would be for a mechanics lien, which may not be recorded at the time of the foreclosure or auction, but the creditor may be able to collect a portion of the proceeds before an earlier-recorded lienholder. This is a somewhat more uncommon event, though, and most homeowners in foreclosure will not experience it. It is also a broader topic than can be discussed fully in this post.
It is the order in which the parties had filed their liens, for the most part, that will determine who is paid off with the proceeds from the auction first, second, third, and so on. Not surprisingly, county property taxes are always paid off first, since the government needs to make sure it gets its share before anyone else. Also, this prevents the new purchaser from having to pay off the back taxes or worry about a tax foreclosure if the transfer does not take place quickly. County property taxes are almost always paid to a current status or otherwise settled in any sale of real estate, whether through foreclosure or otherwise.
Thus, the payment of proceeds from a sheriff sale is not determined by which lienholder files for foreclosure first; rather it is decided solely by the recorded date of the lien. Any lien is counted in the determination of order, whether it is a first mortgage, second mortgage, judgment lien, income tax lien, or other assessment.
This is also a major reason that second mortgage companies are often far more willing to work with homeowners in setting up a repayment plan or taking less money on a short sale they know that, in a foreclosure auction, they will probably not be paid any of the proceeds after the taxes and first mortgage are paid. Other liens beyond the second mortgage often have even less of a chance of getting any real benefit from forcing a sale of a property through foreclosure.
However, any lienholder who has had the property pledged as collateral for a loan can initiate foreclosure proceedings. Even second mortgage companies will start the process if the homeowners are not in contact with the bank and have not expressed an interest in getting the monthly payments back on track. They may hesitate to file for foreclosure, but no response by the owners will eventually force them to take action in the courts. Homeowners will most likely be facing only one foreclosure action against them by a first mortgage company, but this does not preclude the possibility of facing more than one foreclosure lawsuit at a time.
Author Resource:- Nick writes for the ForeclosureFish website, which provides foreclosure advice and resources to homeowners in danger of losing their homes. The site contains descriptions of every method to save a home, including foreclosure loans, bankruptcy, short sales, and more. Visit the site to learn more about how foreclosure works and how to stop the process: http://www.foreclosurefish.com/
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Federal judge: Texas law governs Utah foreclosures - Salt Lake Tribune By Tom Harvey The Salt Lake Tribune
Published Feb 10, 2012 12:18PM MDT
A federal judge has ruled that Texas laws and not those of Utah govern foreclosures by a unit of Bank of America. In doing so, U.S. District Judge Ted Stewart has dismissed a proposed class action lawsuit against the bank and its foreclosure arm, ReconTrust, as well as an attorney who performs the foreclosures In Utah for the bank. The lawsuit was based on a Utah law that says only Utah attorneys and title companies with offices in the state can act as a trustee and foreclosure on property. But ... ... Utah to get $171M in huge foreclosure deal - Salt Lake Tribune By Tom Harvey The Salt Lake Tribune
Published Feb 9, 2012 09:41PM MDT
Utah is receiving an estimated $171 million in money, reductions in mortgage principals and loan modifications as its portion of a sweeping $25 billion deal struck by 49 states and the federal government with five of the largest U.S. banks. Many Utah homeowners who lost their homes to foreclosure over the past four years will get about $2,000 apiece in compensation. Those who are being foreclosed on or whose loan is for more than their home is worth (known as being underwater) could receive red... ... Attorney general's pressure on banks paying off - SFGate: Op-Ed Attorney general's pressure on banks paying off Mortgage settlement is too little, too late for many - Chicago Tribune: Nation Mortgage settlement is too little, too late for many Mortgage settlement is too little, too late for many - LA Times: Business Some who suffered foreclosures say the payouts are a pittance, and many homeowners in trouble won't qualify for help.<br/><br/>The massive mortgage settlement may be setting new national standards for loan servicing, but it may be too little and too late to help troubled homeowners.
<p><a href="http://feedads.g.doubleclick.net/~at/FIhKte3halN0vZviMeNmRjMJJ3s/0/da"><img src="http://feedads.g.doubleclick.net/~at/FIhKte3halN0vZviMeNmRjMJJ3s/0/di" border="0" ismap="true"></img></a><br/>
<a href="http://feedads.g.doubleclick.net/~at/FIhKte3halN0vZviMeNmRjMJJ3s/1/da"><img src="http://feedads.g.doubleclick.net/~at/FIhKte3halN0vZviMeNmRjMJJ3s/1/di" border="0" ismap="true"></img></a></p><img src="http://feeds.feedburner.com/~r/latimes/business/~4/uKa70eYGLUY" height="1" width="1"/> Utah oil-gas firm may lose leases over unpaid debt - Salt Lake Tribune By paul beebe The Salt Lake Tribune
Published Feb 9, 2012 03:39PM MDT
A British company has started foreclosure proceedings against the assets of Richfield Oil and Gas Co. for failing to repay a loan that was overdue by one day. Nostra Terra Oil and Gas CEO Matt Lofgren on Thursday refused to explain why his company moved so soon against Salt Lake City-based Richfield, saying only that ?not much? was disclosed by Nostra Terra about the foreclosure it initiated Feb. 1. Douglas Hewitt, Richfield?s CEO, said his oil and gas exploration company does not understand why... ... Birthplace Of 'Robo-Signing' Eyes Deal Critically - NPR News On Thursday, the federal government reached a $26 billion deal with the nation's largest banks to compensate homeowners. In Florida, where a lawyer uncovered and named the rushed mortgage-approval process, some lawyers and homeowners say technical issues and trust battles remain for courts and the banks. Utah to get $25M from foreclosure-abuse deal - Salt Lake Tribune Staff and news services
Published Feb 9, 2012 10:02AM MDT
All but one of the states have reached a $25 billion deal with the nation?s biggest mortgage lenders over foreclosure abuses, and Utah?s share will be as much as $25 million. Although Utah Attorney General Mark Shurtleff said earlier Thursday Utah?s share would be $100 million, his staff is now indicating the figure will be closer to $25 million. Shurtleff described the settlement as ?a new day for those in Utah who were victimized by big banks? shoddy practices.? Federal and state officials joi... ... Rental costs soar in RI during foreclosure crisis - Boston Globe: Rhode Island Rental costs soar in RI during foreclosure crisis Soup kitchen planned for RI Statehouse - Boston Globe: Rhode Island Soup kitchen planned for RI Statehouse Rosenblum: Hey, Peter Max lovers: Did you paint this car? - Star Tribune: Local Soup kitchen planned for RI Statehouse Deal to settle foreclosure abuses moves closer - Salt Lake Tribune The Associated Press
Published Feb 7, 2012 05:15PM MDT
Washington ? Arizona, Michigan and Florida, three of the states hit hardest by the housing crisis, will join a nationwide settlement over foreclosure abuses, officials with direct knowledge say. They will join more than 40 other states in approving a deal that would benefit many Americans who lost their homes or can?t afford their mortgages. The three states? involvement buoys hopes that a full 50-state deal is imminent. Formal announcements from Arizona and Florida could come within a week, ac... ... Volunteers/Donations Needed 2/7 - Denver Post: News: Local Volunteers/Donations Needed 2/7 Advocates to hold RI Statehouse soup kitchen - Boston Globe: Rhode Island Advocates to hold RI Statehouse soup kitchen Big foreclosure servicer indicted for 'robo-signing' - MSNBC In one of the first criminal prosecutions in the post-housing bust era, DocX has been indicted on forgery charges by a Missouri grand jury, The New York Times reports.<br clear="both" style="clear: both;"/>
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<br clear="both" style="clear: both;"/> Barack Obama: Solving the housing crisis - Salt Lake Tribune By barack obama
Published Feb 7, 2012 01:01AM MDT
In my State of the Union address, I laid out a blueprint for an economy that?s built to last ? an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values of fairness and responsibility. Over the past decade we strayed from those values and we saw what happened. Millions of families who did the right thing were hurt when the massive housing bubble burst. Folks who shopped for a home they could afford, secured a mortgage and made the... ... Pinole good Samaritan faces foreclosure - San Jose Mercury News: News Former East Bay Municipal Utility District plumber severely injured while stopping to help stricken man on freeway; faces mounting debts. DocX Faces Foreclosure Fraud Charges in Missouri - International Herald Tribune: Business The charges against DocX, which provided home foreclosure services to lenders across the nation, are one of the few criminal actions to follow reports of widespread improprieties against homeowners. Key states move closer to foreclosure-abuse deal - Salt Lake Tribune By DEREK KRAVITZ The Associated Press
Published Feb 6, 2012 06:41PM MDT
Washington ? California and New York, the key holdouts in a long-awaited settlement over foreclosure abuses, moved closer Monday to backing a deal with most other states that would force the five largest mortgage lenders to reduce loans for about 1 million households. But those states, along with a handful of others, had not joined the settlement by a Monday deadline set by the nation?s state attorneys general. And a deal might not be finalized for days. California still has ?significant sticki... ... Mortgage relief: Partial plan better than none - Yahoo! News Search Results for mortgage The architects of the joint state-federal mortgage releief plan believe it would be better for homeowners to get a partial deal than nothing at all, according to sources. Occupy Bernal, Petaluma zero in on foreclosures - SFGate: Business & Technology Occupy Bernal, Petaluma zero in on foreclosures OccupyMN Fences Off A Foreclosure-Free Zone In S. Mpls - WCCO: National <img width="150" height="112" src="http://cbsminnesota.files.wordpress.com/2012/02/occupymn.jpg?w=150" class="attachment-thumbnail wp-post-image" alt="(credit: CBS)" title="Occupy Minnesota S. Mpls Home" />The group Occupy Minnesota stepped up their efforts Saturday to prevent foreclosures. <img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=minnesota.cbslocal.com&blog=15909630&post=211019&subd=cbsminnesota&ref=&feed=1" width="1" height="1" /> GOP candidates shy away from Nevada housing crisis - SFGate: Top Stories GOP candidates shy away from Nevada housing crisis Thousands of condo owners stuck in condos they can?t sell - Salt Lake Tribune By LESLEY MITCHELL The Salt Lake Tribune
Published Feb 3, 2012 04:46PM MDT
Pete Farley?s condominium is tidy, updated, clean and in a good neighborhood. And with a listing price of just under $175,000, it is affordable to most buyers. All of those things should make it an easy sell in today?s real estate market. Instead, the condo unit is largely unsellable. The problem is that Farley?s condo community lacks certification from the U.S. Federal Housing Administration. And without that seal of approval, buyers with FHA-insured loans ? and some with other types of loans ... ... Obama seeks to broaden reach of housing assistance - Salt Lake Tribune By JIM KUHNHENN and BEN FELLER The Associated Press
Published Feb 1, 2012 05:59PM MDT
Falls Church, Va. ? Conceding his earlier housing programs have fallen short, President Barack Obama on Wednesday proposed a vast expansion of government assistance to homeowners, aiming to make lower lending rates a possibility for millions of borrowers who have not been able to get out from under burdensome mortgages. The president?s proposal is laden with election-year politics and faces a difficult path in Congress. Obama wants to pay for the estimated $5 billion to $10 billion cost with a ... ...
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