What happened to the second mortgage, on my first mortgage holders to give a certificate in lieu of foreclosure?

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I am unemployed and can not pay the mortgage payments. I have a house on the market, but it will not sell for the amount of the loan. I was the first indication of the mortgage holders (80%), a certificate, thinking instead of foreclosure. If the second mortgage holder (20%) to be able to get money or be able to file a verdict against me as the owner? I live in Arkansas.

  1. Reply
    February 1, 2011 at 10:57 am

    Once the first mortgage holder sells it, any overage will go to the 2nd mortgage. If there is any left after that, then you get a check. If what it sells for does not cover both mortgages, then you are either required to pay the difference or claim it on your taxes as a “gift” and pay taxes on the amount that the mortgage companies wrote off.

  2. Reply
    February 1, 2011 at 11:54 am

    They will not take the deed, they would rather foreclose, but either way the second will follow you.

  3. Reply
    February 1, 2011 at 11:58 am

    Ultimately the second will likely end up writing it off, although have no doubt they will seek remittance from yourself. Likewise will have to report forgiveness by 1st on your taxes.

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