Consolidating 1st and 2nd mortgages
It all depends on the terms of the loan and local state laws.However, normally if mortgage payments are not received within 150 days, the bank can proceed with the foreclosure process.
If the owner made consistent timely payments and had no serious defaults, the lender will be more receptive than if the person has a record of unexplained late payments.Homeowners falling behind in payments or who know they are likely to do so in the immediate future should contact the lender right away to discuss alternative payment arrangements.Either the first or second mortgagee can initiate a foreclosure.The foreclosure process varies from state to state, but generally takes from two to 18 months.Thank you for your excellent question about how a delinquency on a second mortgage affects your home and the chances that a foreclosure may result.If you are current on your first mortgage and become delinquent on your home equity loan (which is a form of second mortgage), the second mortgage lender has the legal right to foreclose on your house and property.
However, it may not do so because of economic reasons, which I will discuss below.
Here is the good news: Lenders do not like to foreclose on mortgages because foreclosure offers a poor economic return.
Lenders foreclose only as a way of limiting losses on a defaulted loan.
Generally speaking, when homeowners get behind on mortgage payments, lenders will work with them to bring the loan current.
To do so, however, the owner must stay in communication with the lender and be honest about the financial situation.
The lender’s willingness to help with current problems will depend heavily on past payment records.