When can creditors not take your house with a second mortgage?

Answer by  patti (29325)

Generally creditors cannot "take" your house in exchange for debt. They can put a lien on your property, thus impeding the sale process. Lenders who hold the deed can foreclose if the loan is defaulted, but in the U. S. your home is not subject to seizure except in specific circumstances that usually involve the federal government.

Answer by  mammakat (11147)

It is my understanding that having a second creditor does not protect you from foreclosure. You are still liable for the lien upon your house that the second mortgage creates. The responsibility is on YOU, not the creditor seizing. You may be protected by filing bankruptcy reorganization if you can show to the court that you can meet judicious payments.

Answer by  CarlSCansino (464)

A second mortgage holder can only foreclose on the equity of the home. The first mortgagor would have the priority of foreclosure and as long as that note is current the second mortgage company cannot foreclose unless there is more than enough equity.

Answer by  krpmuffitt (223)

A creditor's can only go after your house if you have enough equity in your house to pay the first and second mortgage and all or part of their debt.

Answer by  MSH (305)

generally when the first mortgage is greater than the value of the house, they would have to buy out the first mortgage and taxes first. This would not be finicially sound for them, it would be throwing good money after bad. Or if there is an enviromently problem with the property