Equity Home Loans

Can my 2nd and 3rd mortgage holders foreclose on my house (1st mortgage is not delinquent)?

I have a home worth about $325,000. On this home, I have a $150k first mortgage with WaMu, a 2nd mortgage (home equity line with Chase) with a $200k balance and a 3rd mortgage (another home equity line with Harris Bank) with a $150k balance. The first mortgage (and taxes/ins) are up to date but I cannot afford the payments on the 2nd and 3rd mortgages due to being placed on disability. If I keep my first mortgage payments up to date, can either Chase or Harris Bank seek to foreclose on the house? The reason I am wondering about this is there is no equity in the house for the 3rd mortgage holder (Harris Bank) and the 2nd mortgage holder (Chase) would have to pay out the 1st mortgage holder before they would recover any money for their outstanding balance. Given the current state of the real estate market, i am not even sure I could sell my house for $325k. My hope is that over a lifetime, i can pay the 2nd and 3rd mortgages after I pay off the first mortgage in 10 years.

Public Comments

1. Yes the 2nd or 3rd mortgage holder can definetely foreclose on your home. Perhaps you should see a bankruptcy attorney right away. You may need to sell your home or find some way to save it. Can you take in lodgers to pay your second and third? Be sure to see an attorney asap if you have no way to pay them. filing bankruptcy temporarily stays the foreclosure giving you time to do something, either selling or ......
2. Yes...the only difference is the 1st mortgage holder gets paid the principle balance first and then the other two gets paid in order to their position on title. ANYONE that has a lien against your home, if you default, can seek and will receive foreclosure rights...you signed papers at closing allowing for that to happen. You can't pick and choose which mortgages to pay...it's a package deal and if you can't find a way to pay them all you will lose the home. HOW in the world did you manage to get a 3rd mortgage on the home for $150K?
3. The 3rd mortgage can, but most likely wouldn't foreclose. They are not likely to recover anything from the proceeding because the first 2 have to get paid first. If there is enough equity for the 2nd mortgage to recover a good chunk of what they are owed, then they definitely would consider foreclosing.