Will My Credit Union Foreclose If No 2nd Lien Loan Modification?

Will My Credit Union Foreclose
If No 2nd Lien Loan Modification?

by Leticia Llamas
(Arleta, CA USA)

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Will My Credit Union Foreclose If No 2nd Lien Loan Modification?

I have a 2nd mortgage with my credit union and have tried to modify the loan twice and have been denied for different reasons.

Now my 2nd mortgage is seven going on eight months late. The monthly payment is $893.00 so the total now due by October 27,2010 is $7,144.00.

I want to know can my credit union foreclose on my home? I need help!

Mortgage Foreclosure Answer:

by Mortgage Foreclosure Expert - Dan North

Unfortunately there are no Credit Unions that are participating in the Making Home Affordable Second Lien Modification Program.

That does not mean your credit union could not modify your 2nd mortgage but they are not required to. There may be contract clauses or Credit Union Bylaws that would prevent modification.

Find Out If Your Credit Union Is Authorized
To Modify 2nd Mortgages

Speak to someone you know (possibly the loan officer that made you the loan), attend special membership meetings or someone in management (such as someone on the board of directors) at your local credit union branch. Ask if there is policy, bylaw or contractual agreement that would prevent the credit union from modifying a 2nd mortgage.

If that is not a stop ask what exactly would have to happen so that a 2nd lien mortgage could be modified and ask to be helped.

Can A Credit Union Foreclose On A 2nd Mortgage?

In a word, yes they can, but would they?

That depends on what your loan to value (LTV) is on your home. If you have more equity in your home than you owe on both your 1st and 2nd mortgage they might foreclose.

You would most likely have to file bankruptcy to stop it and have the 2nd mortgage stripped off the home at which point the Credit Union would get nothing, while you keep your home if you can keep up the 1st mortgage payments. (If this is the scenario you should talk with an attorney about this option in the event you are foreclosed on.)

For this reason most lenders on 2nd mortgages do not foreclose because they will have to spend money to foreclose but will be stopped and stripped from the property if you go to bankruptcy.

If you are upside down on you mortgages, particularly if your home is worth less than your unpaid principal balance (UPB) on your 1st mortgage, there would be no reason for your second mortgage lender to foreclose. They would get no money and are more likely to hope you do not fall behind on your 1st mortgage and trigger a foreclosure.

File a complaint on your Credit Union with the National Credit Union Administration (NCUA)

Take the Probulica.org survey on the loan modification process by clicking here. Your participation will help expose the truth.

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