Van Nuys Second Mortgage Settlement Lawyer
In the United States, household debt has hit a record $14.3 trillion. People throughout the country are struggling with mortgage debt and second mortgages. Many of them are even facing foreclosure. If you have taken out a second mortgage and cannot repay it, our Van Nuys second mortgage settlement lawyer can explain your legal options.
What is a Second Mortgage?
When you first took out a mortgage to purchase your home, you agreed to allow your lender to seize it in the event that you did not make the payments on your loan. If the lender seizes your home, they will then sell it in a foreclosure sale.
Millions of homeowners have also taken out a second mortgage, which is exactly what it sounds like. A second mortgage is a loan taken out on a property that already has one mortgage on it. Second mortgages come in the form of a home equity loan or a home equity line of credit (HELOC). The second mortgage is tied to the equity in the property.
How to Settle a Second Mortgage
If you owe a credit card company a significant amount of money you cannot repay, it may be possible to negotiate a settlement with them. A settlement allows you to repay the loan for less than you originally borrowed. A second mortgage settlement works the same way.
With a settlement, you pay a lump sum in return for the lender settling the second mortgage for less than what it was originally worth. The lender then releases their security interest or lien in the equity in the home, as well as their right to pursue a deficiency judgment. A deficiency judgment is a court order that holds you responsible for paying the difference between the amount owed on the loan and the proceeds from a foreclosure or short sale.
Benefits of Settling a Second Mortgage
Settling a second mortgage has many benefits. It will free up some of your cash, resolve your debt, and increase your ability to sell the home. The biggest benefit of a second mortgage settlement is the fact that you can settle the loan for as little as 30 to 40 percent of what was originally owed. Further, a second mortgage settlement can also improve your credit score by reducing your debt-to-income ratio.
Second mortgage settlements are also beneficial for the lender. If you are unable to repay your second mortgage, lenders may assume that you are having difficulty paying your first mortgage, as well. First mortgages are given priority over second mortgages. This means that if your first mortgage lender forecloses on the home, the second mortgage lender is at risk of not recovering any portion of the loan.
Call Our Second Mortgage Settlement Lawyer in Van Nuys Today
If you are having trouble paying your second mortgage, you are not alone. At Wadhwani & Shanfeld, our Van Nuys second mortgage settlement lawyer can negotiate with your lender on your behalf and greatly reduce the financial stress you are currently feeling. Call us now at 818-658-2669 or chat with us online to request a consultation.
