Sunday, September 26, 2010

Stop Paying that Second Mortgage

If you're upside down on your home and have fallen behind on your mortgage payments, it would be smart to stop paying all the loans on your home including the second mortgage.

Usually, it's the second mortgage who has taken a higher risk and in return, they have jacked-up the interest rate above 9%.  I've seen some home-owners paying over 11%.  They are the lender who is most likely to walk away with nothing if you foreclose and the same lender who will strong-arm everyone involved to get some of that money back if you decide to short sale (Usually 10% of loan amount).

Like most people, if you've tried to modify your home loan but have failed repeatedly, your alternative is to hire a local real estate agent to short sale your home.  If you continue to pay the second loan, you are actually making it harder for your agent to present a case that you can't afford the home.

It's usually the second mortgage holder who is usually doing the most threats.  I've heard them all.  Keep in mind you have rights in Los Angeles County and nobody can throw you out of your home without first going through the foreclosure process.  

Don't wait until it's too late to have a successful short sale.   You're still okay up to 4 months of non-payment but if you wait to long, then you run the risk of not being able to have a successful short sale.

If you're thinking of short selling your home in the San Fernando Valley, call Richard Johnston 818-730-4128.

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