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Pay off second mortgage right away after foreclosure?

Milwaukee, WI |

I am going through the foreclosure process. My loan is through WHEDA and I also had taken out a small second mortgage through them to cover closing costs. I understand that once the house has been turned over to them, I will still be responsible for paying the second mortgage. It's a small amount - less than $3,000 but I can't pay it in one lump sum. I currently make monthly payments of less than $50. Will I be required to pay off the second mortgage immediately, or will I still be able to make regular payments?

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Filed under: Foreclosure Real estate
Attorney answers 2

Posted

You are not in default on the second. You can continue to make your monthly payments according to the agreement, unless the agreement provides otherwise.

I hope this helps.
Respectfully,
Steven A. Leahy
www.chicagotaxteam.com

Please note that the above is not intended as legal advice, it is for educational purposes only. No attorney-client relationship is created or is intended to be created hereby. You should contact a local attorney to discuss and to obtain legal advice.

David R. Barnes

David R. Barnes

Posted

It is incorrect to say that the borrower is not in default on the second. The borrower may be in default if the mortgage contains an acceleration clause in the event of a foreclusre, which is a common clause. The mortgage needs to be carefully reviewed.

Steven Anderson Leahy

Steven Anderson Leahy

Posted

I stand corrected. Although I did say "unless the agreement provides otherwise."

Posted

Generally mortgages contain provisions that if the property is sold or foreclosed upon, the outstanding loan obligations secured by the mortgage become immediately due and payable. It is important to review the terms of your mortgage to see if it contains such a provision.