Legal Question in Real Estate Law in Florida

Re: 2nd home loan default

NOTE: This communication is not intended as and should not be interpreted as legal advice. Rather, it is intended solely as a general discussion of legal principles. You should not rely on or take action based on this communication without first presenting ALL relevant details to a competent attorney in your jurisdiction and then receiving the attorney's individualized advice for you. By reading the "Response" to your question or comment, you agree that the opinion expressed is not intended to, nor does it, create any attorney-client relationship, nor does it constitute legal advice to any person reviewing such information, nor will it be considered an attorney-client privileged communication. If you do not agree, then stop right here, and do not read any further.

If you fail to pay, the loan will eventually be foreclosed upon. As this is a second mortgage, it is subject to the rights of the first mortgage holder. You will be responsible for any deficiency including court costs and attorney's fees. You would be smart to see if you can either refinance this second mortgage or make some other arrangements with the lender to salvage your credit history.

Scott R. Jay, Esq.

Re: 2nd home loan default

The information provided in this response is not, nor is it intended to be, legal advice. Many factors contribute to providing legal advice, including the specific facts of a situation. You should consult a competent attorney in your jurisdiction for advice regarding your individual situation. By reading the "Response" to your question or comment, you acknowledge that the opinion expressed is not intended to, nor does it, create any attorney-client relationship, nor does it constitute legal advice to any person reviewing such information, nor will it be considered an attorney-client privileged communication. If you do not agree, then do not read any further.

I am assuming that the second home is in Florida and that you have personally signed the note and mortgage. If you cannot make the payments due under the mortgage, the bank will ultimately file foreclosure proceedings against you. If the foreclosure action is completed, your house will be sold at Sheriff�s Sale and you will lose the property. If the value of the property on the date of the Sheriff�s Sale was less than the mortgage balance, the bank will have the option to file a motion for a deficiency judgment after the foreclosure sale. This is an additional court proceeding that could result in a personal judgment against you for the deficiency. The bank could take steps to enforce this judgment against other assets that you own. In addition, there may be federal income tax consequences in connection with a foreclosure proceeding and subsequent deficiency judgment, a short sale, or a deed in lieu of foreclosure. Depending on the facts and circumstances, you could receive a 1099 reporting income for the forgiveness of the mortgage debt. Bottom line: allowing the property to go into foreclosure might not be the end of your personal liability for this property. A deficiency judgment and/or 1099 income are possibilities. I urge you to consult with a real estate attorney as soon as possible to evaluate the facts of your situation and explore the possible strategies and consequences.

Re: 2nd home loan default

I agree with Marilyn in the event you have no equity in the property, and a forced foreclosure sale produces a price lower than what you owe on the mortgage, plus foreclosure fees. This is a responce to an Internet question and the reply is not intended to be legal advice or as creating an attorney-client relationship.

Re: 2nd home loan default

Same as any other debt. They can foreclose and sue you for any money due.