can a finance company you have a 2nd mortgage loan in default with garnish your wages?

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Condo in California, loan with Indymac Bank. If I am delinquent for 3 months and disapproved for a loan modification, how much longer will I have to attempt a short sale?

Infographic: What would you do if you can’t pay your mortgage?

Infographic of Trulia & RealtyTrac’s Harris Survey findings on what most people would do if they couldn’t pay their mortgage. The survey was conducted 11/2-11/4, 2010 among 2,034 U.S. adults aged 18 years and older.

7 Comments
  1. Reply
    mc2ts
    February 23, 2011 at 2:41 am

    I doubt it, but you should start looking for a new place to live, they can take your home and sell it.

  2. Reply
    bigrob
    February 23, 2011 at 3:38 am

    To garnish wages you have to have a judgment from suing and winning. After the judgment if person sued does not pay then you go after wages and any other assets that exist, including bank accounts, property, autos, etc.

    However, if a lender is in 2nd position (2nd mtg.) they can still foreclose on the property (they don’t have to do the above–different process.) They may be a little more reluctant since they will still have to satisfy the 1st mortgage before they get their money. They often figure if you can’t keep up your payments to them it is just a matter of time until you slip completely over the edge and the primary lender will foreclose and then they will still get theirs.

    Best thing to do is make your payments on time–if you are behind TALK to them and work out a payment plan that will get you caught up.

    You don’t want to see your house being sold on the court house steps. Foreclosure is the absolutely worst thing that you can do to your credit. Worse and Bankruptcy.

  3. Reply
    Jared F
    February 23, 2011 at 3:53 am

    The short term answer is no.

    They are secured by the property. If they foreclose on you, whatever the property sells for is their only remedy (at least in Washington State with Deeds of Trust).

    Actually, it would be helpful to know what state you are in before giving specific advise.

    My suggestion, pay $ 100 for a real estate attorney’s time. Have all of your questions/fears on a paper, printed out, organized by importance. That will be a cheap $ 100, help you sleep better at night, and arm you with the law as it is in your state.

    Good luck,
    Jared

  4. Reply
    Bob C
    February 23, 2011 at 4:11 am

    You can attempt a short sale at any time.

    The problem is that the short sale has to close within a period of time allowed by the bank. In other words, if it takes 6 months to get an offer with a 3.5% down payment and a 90 day escrow, good luck getting the bank to accept it. However, if, next week, someone wants to pay cash and close right away, you stand a pretty good chance of making it happen.

  5. Reply
    Noi's mom
    February 23, 2011 at 4:20 am

    That is actually a question you need to pose to Indymac , as it is completely up to them as to how they wish to proceed. When you were denied a loan modification, did they offer the option of a short sale? Normally an investor will let you know if a short sale is an option upon denial of a loan mod. In this market, each bank/investor is in their own dire need and it really depends on how desperate their need to recoup this money. The longer they allow the process to drag out, the more costly it can become for them. Best advice is to contact the litigation department of IndyMac and ask them if a short sale is an option for you now that the modification has failed.

  6. Reply
    BNICKS
    February 23, 2011 at 5:08 am

    Indy Mac would be the one doing the short sale after you either left or got forclosed on. The bigger question is why did your mod get turned down? If your behind on the mortgage a refi wouldn’t be an option and the mod is the best/only option for you if you want to keep your place … check out http://www.makinghomeaffordable.gov

  7. Reply
    Jaylin
    February 23, 2011 at 5:33 am

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