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Beware of 2nd lien holders!

April 7, 2014 : michaelgaddis : 6:37 pm : California Loan Modification Attorney

Rising home values throughout California are a reason to rejoice for most homeowners.  However, these rising home values are causing problems for homeowners still struggling to keep their home.  In particular, homeowners that previously modified their 1st lien but are still delinquent on their 2nd lien (or other junior liens) need to be cautious.  As values rise, so does the value of the security interest held by the 2nd lien holder.  For years, due to fallen values, 2nd lien holders were virtually powerless to enforce their foreclosure rights.  Over the years these 2nd lien holders sat quietly waiting for a time when they had more leverage to negotiate an acceptable settlement.  Typically, the 2nd lien holder would wait until they were contacted by the homeowner seeking the lien holder’s acceptance of a short sale or seeking a settlement for a complete release of the lien.  Other than these situations, the 2nd lien holder had virtually no leverage due to the fact that their security interest in the property was so out of position.

As values continue to rise these 2nd lien holders are becoming more empowered and are “rising from the dead”.  They pose a serious threat to homeowners.  Ignoring them or not properly addressing the threat can be catastrophic to homeowners.  Many homeowners falsely believe that their 2nd lien holder just “goes away”.  This misconception is attributed to the fact that the 2nd lien holder sometimes appear to “disappear”.  Most homeowners falsely believe that just because they stopped receiving correspondence from the 2nd lien holder, sometimes for years, that the 2nd lien was forgiven.  The problem is that HELOCs and 2nd loans have 2 parts 1) a personal obligation to pay on the note and 2) a security interest on the property.  Many homeowners blend these 2 aspects into one.  For example, many homeowners feel that because they went through a Chapter 7 Bankruptcy that the 2nd lien holder cannot foreclose.  The reality is that while their personal obligation to pay the note was discharged via the bankruptcy, the 2nd lien holder’s security interest remains.  These 2nd lien holders, powerless to collect against the homeowner, sit back and wait until an opportune moment arises to enforce their rights under the security agreement.

Sometimes the investors on these 2nd notes sell them off at a fraction of face value, typically to a savvy investor that has the time, knowledge and resources necessary to use the lien as leverage to either negotiate a favorable settlement or force a Trustee Sale.

Homeowners that have dormant 2nd lien holders need to be vigilant about signs that the 2nd lien holder is beginning to pursue foreclosure.  Homeowners should not ignore correspondence but rather inquire with the lien holder or seek legal advice ASAP.  Rising values strengthen the 2nd lien holder’s position and the more secure the 2nd lien holder feels the more likely they are going to make a move.

Just to recap, if you have a 2nd lien, or any junior lien for that matter, you must be vigilant.  As home values increase so does the motivation of junior lien holders to attempt recovery.

B of A Loan Modification Success for Fallbrook Homeowner

March 28, 2014 : Katie Chang : 5:00 pm : Bank of America Loan Modification, California Loan Modification Attorney

Bank of America Loan Modification

For Fallbrook, California Homeowner

The Law Offices of Michael Gaddis recently obtained a B of A or Bank of America Loan Modification for a Fallbrook, California homeowner. See if Michael Gaddis can help with your loan modification with a free consultation. Call 888.242.2272 to schedule an appointment.

Bank of America Loan Modification Video Transcript

**Video auto-transcribed by YouTube, please excuse any inconsistencies.

I am Michael Gaddis. Recently my office obtained a loan modification from Bank of America for a homeowner Barbara California. When the homeowner originally came to me they were basing a trustee sale, I think it was just a wee seven to 10 days away. They were panicking they’ve been trying to obtain a loan modification for years. It’s the usual story their use many other people all everybody seemed to fail you know that type of thing, so when I initially spoke to them on the phone I kinda went through their situation realize that you know based upon what they were telling me verbally. They have had a pretty good chance at getting a loan modification. I was in understanding what with the problem lies so I invited him to come to my office which they did and they brought all their documents and I did a thorough and reading reviewer weather situation was in. After I reviewed a decade even more convinced that they should be able to obtain a loan modification. I didn’t really understand what the pitfall was. I didn’t look at any other prior loan modification applications see it maybe they were presenting it incorrectly or not, but they’re fortunate because they found me do because they have a America and I have a very good relationship with Bank of America. I’ve been working with Bank of America since 2008. Since the inception of this housing prices and during the course at that time, I have established many many solid the contacts. So I have a lot of connections at Bank of America that allow me to challenge issues and make sure that underwriting is completed correctly and this is no exception. Once I submitted the the loan modification application my initial first to Corso duty was to a get the trustee sale stuff which I did and then I had to work on getting mister underwriting now in this situation. The underwriting didn’t take that long I mean it wasn’t is laborious as it can be I’ll I think it’s a matter presentation as I told you earlier. I was fairly certain that they should have gotten one initially and sure enough they did they got a trial modification which I now holding in my hand right here in this little modification is really good it’s really important to these people as everyone who calls me their house forces is very important to them, but some more than others summit summits home some it’s a business and home and in this case these people were self-employed in their business was run at their home and they had to hold special outfit to accommodate their business. So if they lost their home they would in essence be taking it several steps back in their in their business and it would affect them both from an emotional standpoint and a financial standpoint. So it was really important that that they save their home and distraught modification is great prior to this trial modification their payment was six thousand seven hundred and fifty dollars a month piti as principal interest taxes and insurance about the trial loan modification is for four thousand two hundred and seventy nine dollars that is over a 2400 holder to difference in in in Pavia test that’s huge and this represents this 4200 79 represent future piti as well. So it’s comparing apples to apples so this is a great trial loan modification for these people and and because it they’re going to be able to save their home. So if you have a question any questions or comments regarding out a loan modification; if you are at a bank of America loan modification are Bank of America alone and you’re having difficulty getting it through, please feel free to give me a call. I give free consultation sit doesn’t cost you a dime to talk to me for me to come pick through your situation and see what I think you can reach meat. My local area code 760-692-5950, 760-692-5950 or you can visit me through my website which is Thank you for taking the time to watch this video and I look forward to hearing from you in the future.

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