Legal Question in Real Estate Law in New York
Default on second home mortgage
We recently moved due to a job loss. We purchased a new home and put our old home on the market. It was rented with a rent to own deal. Now the buyer can't get a mortgage and we can't pay the old mortgage any longer. What happens if we default? Will we lose our current home? What options do we have?
2 Answers from Attorneys
Re: Default on second home mortgage
If you default on the old mortgage the bank will foreclose on the house. Upon sale if there is a deficiency judgment the bank may be able to sell you new house to pay for the Judgment. The bank will also have the option of income execution against your job and take assets such as bank accounts, stocks, bonds, etc.
Mike.
Re: Default on second home mortgage
Your option is to work with your bank to get the old house sold. Either a "short sale" (sell for less than you owe) or turn the house over to the bank in lieu of foreclosure.
Before doing either talk to an attorney. Alot depends on how much equity you have in the house and how far behind you are.
The worst you can do is just walk away and default. Too much to lose!
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