Private 2nd Mortgage Holder Trying To Foreclose.
I have a client in Illinois with a 16% 5 year balloon 2nd mortgage held by a local investor who originated the loan. Her first mortgage is with Ocwen, but she is up to to date with it. She had filed ch. 13, but somehow the 2nd tripped her up and managed to get a stay on the b/k, knocking the 2nd's arrearages out of the b/k. The 2nd is claiming $37,000 owed on an original loan of $15,900, he allowed her to skip payments, knowing it would just add to his return down the line.
My question is, since she's up to date with Ocwen, how does the 2nd force a foreclosure when the first is up to date? Her LTV is 90%. I have had some successes with short sale offers to first mortgage holders, knocking around 30% off the balance owed. But negotiating with a 2nd holder, who's nothing more than a local predatory lender is something completely new. Any experiences with 2nd's would be greatly appreciated.
Whether the 1st is current or not has nothing to do with the rights of a 2nd. If they can manage a stay, and if they can foreclose in the midst of a b/k and if they can pay off the 1st, then they can own the house. However I would be mildly surprised if the 1st would do a short sale on a performing debt. Just my thoughts.
Good Luck,
Shawn(OH)
Ooops, I think perhaps I was not clear. I am trying to negotiate with the 2nd, not the first lienholder. Just trying to get some more info, as info is power. If they "owe" 37k based on 16% rate, might offer to settle for 15-20k.
Ooops, I think perhaps I was not clear. I am trying to negotiate with the 2nd, not the first lienholder. Just trying to get some more info, as info is power. If they "owe" 37k based on 16% rate, might offer to settle for 15-20k.
I apologize, I think I read it wrong. I think I would be talking to or having my client talk to the trustee of the bkr and see how or why this stay was executed. There may be a little chcanery going on and your client may have legal grounds. Talk to the attorney of record.
Good Luck,
Shawn(OH)