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paula Tubertini · Oct 25, 2008, 01:02 PM

In 1988 I sold my house and loan the buyer 10,000.00 as a second mortgage. We set up
Payment. She defaulted, we tried to talk her into paying but failed. I want to know if I can foreclose on her now and if I do what are the consequences.

Fr_Chuck · Oct 25, 2008, 01:43 PM

Do you know the value of the home and the current amount on the first mortgage

paula Tubertini · Oct 25, 2008, 02:22 PM

The house is value at 75000.00 and I don't know how much is own on the first mortagage but on my credit report it stated paid by Fannie Mae.

Fr_Chuck · Oct 25, 2008, 08:52 PM

I ask because the issue of foreclosure is that if and when it is sold, the money goes first to the first lender and then if money left, the second.
If for example the house is valued at 75,000 ( and the loan is 70,000, it is likely if the home is actually sold there would be no money to the seond lien holder.

paula Tubertini · Oct 26, 2008, 05:42 AM

They have been living there for 10 years, they don't want to move. They owe us for that money it is in the deed of trust of the payment arrangements. They never paid the amount decreed for them to pay. We tried to collet to no avail. Why can't we foreclose on them and garnish their wages.

excon · Oct 26, 2008, 08:31 AM

Hello paula:

You can't "foreclose" and force a sale because the first mortgage holder is the only one who can do that. You can sue them, however, and I would. If the balance is down to around $5,000, you can do it in small claims court, assuming that's the limit in your jurisdiction.

excon

John WA · Oct 29, 2008, 07:59 PM

Any one of the note and deed of trust holders absolutely CAN foreclose if his note is in default.

Read your DOT and you'll find it gives you tha right, just like the bank's rights to foreclose.

If you, as the 2d note holder, now do foreclose, you'll just have to take over your buyer's 1st mtg with the bank so be prepared for that.

I'd proceed by sending buyer a certified, with receipt, letter telling her that if she's not currrent on your note by a certain time in near future, you WILL foreclose and take the house... and also remind her that her default on YOUR note is also a default on the bank's note, probably, so they too could foreclose on her.

Also tell her that if she's not current with you in very near future, you'll notify the bank of her delinquency and your pending foreclosure.

As for your being able to go after her on deficiincy judgment, maybe/maybe not, as in many states a homestead is exempted from deficiency J, so you'll need to read your laws and see what your state says about that.

When you sold her the house you should have there and then taken the right, in writing, to contact her bank so as to stay current on her payments to the bank, so do stay in touch with them to see if she's current or in default... if they haven't already foreclosed on her for delinquency in their pmts.