I have 2 houses with the same lender but will walk away from one, will the other mortgage get affected?
by Mortgage Rates on Sunday, October 17th, 2010 | 7 Comments
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Yes it will seeing that it’s from the same lender. They can put a lean on your 1st home. They can also sue you at the end.
It could but not without a court date first. But it will destroy your credit and a toothpick on credit will cost you 30% interest rates. Things like this are why our economy is STILL set to tank over the housing market and the homes people just “walk away” from. VERY frightening.
Yes…you should worry because they can sue you for the debt. You should try to sell the home via a short sale and get out from under it that way. In a short sale, you can negotiate any deficiency with the lender and even get any remaining debt canceled. You can’t do that in a foreclosure. Even if the lender refuses to cancel the debt and reserve its right to seek a deficiency judgment down the road, that debt will be much smaller if you were to short sale the home.
Depends. They could try to raise the rate on you. Maybe you should switch lenders before walking away from the first one.
You signed two separate loan docs when you purchased your two homes. These are two different transactions and one have nothing to do with the other. Your lender can not add collateral that was not in your loan docs when you signed them.
That would be like you using the same lender to finance your home and auto. Since you are not able to make the auto payments the lender then turn around and say “Oh by the way since you can not and did make your car payments we found that we financed your house therefore in addition to repossessing your car we are gonna now gonna foreclose on your house in.
There is a possibility that your lender can take both houses and that is if you used one as a wrap to add collateral to purchase the other. Then you have agreed to and signed loan docs that one loan encumbered both properties.
If you did not use the wrap technique to purchase one house then you signed two different set of loan docs using only that property as security or collateral for the loan the lender gave you to purchase the house.
With this being the case your lender may not attempt to collect collateral that is not on your loan docs.
If the house sell for less than the balance of your mortgage loan, your lender will send you a 1099 indicating that you had a gain, therefore upon receipt of this 1099 you will be required to pay taxes based on the amount on the 1099.
I hope this has been of some benefit to you, good luck.
“FIGHT ON”
NO NO NO it won’t! These are two separate loans each securing one property. However, it will destroy your credit having a foreclosure on it.
is this house a rental. This is the most important question.