Can my current bank that is financing my 2nd home cancel my loan if I allow my first home go into forecloser?

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I have a home that I want to sale but I owe more than it is currently worth with the market being so bad. I also have a home that I just bought. My 1st home have a 1st and 2nd mortgage. They are with different people. My 2nd mortgage on the 1st home is with the bank that is financing my 2nd home. If I go into forecloser with the 1st home can my bank cancel or take back the loan for the 2nd home? I know that I can do a shortsale, but even then- can they stop financing my 2nd home? Please someone help me?

6 Comments
  1. Reply
    kemperk
    May 3, 2011 at 12:23 am

    a bank can do most anything.
    DO NOT ALLOW THE foreclosure.

    Get 2 jobs, do whatever, to save
    the home. I can guide you for free.

    treat the weak home like a child
    that is sick…….help it become strong
    again, economically.

  2. Reply
    budhah1
    May 3, 2011 at 12:42 am

    If you read the fine print you will more than likely see a paragraph that says in essense if you default on one loan at that bank you default on all loans, and each house will be collateral for all loans. I had that on a couple of mine and had the bank remove them prior to signing the papers…

    So yes you could put both places at risk.. Read you mortgage a bit more careful..

  3. Reply
    alexfont0801
    May 3, 2011 at 1:27 am

    You might have what is called 80/20, 70/30, or 90/10. Since you have two loans it means that you don’t have principal mortgage insurance (also known as PMI). You still will owe the money to the Lender for that 20 percent option. You see your first mortgage holder will stay with the property and foreclose on. Then they can resell it at whatever price they want and whatever is left from the balance you still owe them. Now, next year you’ll receive a 1099 which you will have to report whatever is left. For example you have a loan for 100K and the bank sold it for 80K but you still owed 20K on the balace of the loan. This is qualified as an earning and you’ll have to place it on other income. So those 20K is added to your income. And the bank would reported as a loss. So you’ll get an additional form for the second mortgage.

  4. Reply
    RAR24
    May 3, 2011 at 1:58 am

    The lender on the first loan will come after YOU for the difference. Then the second lender will come after your assets. Yes, they can put a lien on all your property.

  5. Reply
    david d
    May 3, 2011 at 2:18 am

    Their recourse on the first loan is limited to the collateral you pledged. That means that foreclosure on the first home will have no direct impact on any contract regarding the second home. But that doesn’t mean that any debt remaining after the sale of the first home is forgiven and it could very well result in a lien being placed on your current home. You owe what you owe,

  6. Reply
    Shala Rose
    May 3, 2011 at 3:15 am

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