Anybody else with two second mortgages?

[berniefergie]

thanks doingpoorly, I'll give it a try

[berniefergie]

I found the public records. The mortgages other than the 1st mort. was recorded almost a month and a half apart, so that should mean that one is a 2nd and the other is a 3rd. Right?

[TooMuchCredit]

Yes, it goes by the dates they are recorded. I have a 2nd an a 3rd. I had a HELOC that apparently never got closed when I got my equity loan. I (stupidly) saw it still open a couple years later and accessed it.

What you may run into is arguements over which is 2nd and 3rd. I stripped both as the value was less than I owed on the 1st. However, it might have gotten messy if my home was worth more than the 1st, but less than the 2nd which meant only the 3rd could be stripped. The 3rd would most likely contest which position it was in.

[mysticspirit25]

could be fraud....

While I somewhat agree that it is in theory a 2nd and 3rd, in reality (and there have been prosecutions on this), is is COULD be considered fraud, if each other lender didnt know that you were going to take out the extra debt...in Maryland, mortgages are not recorded immediately and sometimes take a month or longer, depending on the title company and court recorder, so I could take out a loan from Wells Fargo and close tomorrow, and take out a loan from BOA the following week and neither bank would know about the other loans, nor would it show on a title search...

The only way it would NOT be considered fraud in my opinion is if both lenders knew that you were taking out simultaneous mortgages, and I am asssuming they did not, otherwise, why didnt you just get the money from the first lender who would be the 2nd lienholder.....

But even if you didnt disclose it and it was fraud, the likleyhood of prosecution is rare, I doubt the FBI will care about your 4 year old mortgages.....but I just want to make you aware that there have been fraud prosecutions on this sort of thing...I forget the technical name of it...but I have seen cases on mortgagefraud.org.

Not to worry you, but the key is if you lied on your application, the first loan to close that day or week, you are OK on, but the second that you closed on, HAD to list the debt of the previously closed 2nd earlier that day or week, otherwise if the debt was not listed on the mortgage app you sign at closing with the statement "that nothing has materially changed since you applied for the loan...." then it is mortgage fraud, because you did not disclose the other payment, and by not doing that lied on your application.

[berniefergie]

Hopefully our lawyer can defend us well. My wife and I are unemployed. We are going to surrender the house so we are hoping for the best. We have definitely learned our lesson.

[OhioFiler]

While I somewhat agree that it is in theory a 2nd and 3rd, in reality (and there have been prosecutions on this), is is COULD be considered fraud, if each other lender didnt know that you were going to take out the extra debt...in Maryland, mortgages are not recorded immediately and sometimes take a month or longer, depending on the title company and court recorder, so I could take out a loan from Wells Fargo and close tomorrow, and take out a loan from BOA the following week and neither bank would know about the other loans, nor would it show on a title search...

The only way it would NOT be considered fraud in my opinion is if both lenders knew that you were taking out simultaneous mortgages, and I am asssuming they did not, otherwise, why didnt you just get the money from the first lender who would be the 2nd lienholder.....

But even if you didnt disclose it and it was fraud, the likleyhood of prosecution is rare, I doubt the FBI will care about your 4 year old mortgages.....but I just want to make you aware that there have been fraud prosecutions on this sort of thing...I forget the technical name of it...but I have seen cases on mortgagefraud.org.

Not to worry you, but the key is if you lied on your application, the first loan to close that day or week, you are OK on, but the second that you closed on, HAD to list the debt of the previously closed 2nd earlier that day or week, otherwise if the debt was not listed on the mortgage app you sign at closing with the statement "that nothing has materially changed since you applied for the loan...." then it is mortgage fraud, because you did not disclose the other payment, and by not doing that lied on your application.

The 4 years is key to his bankruptcy. It would be much more difficult to prove they intended to defraud the lender since they've paid both mortgages for 4 years. I don't see either lender pursuing such.

[mysticspirit25]

Thats why there is only a remote chance of prosecution, b/c it does not look like he intended to defraud, plus it was in 2005 when this type of thing was very common, the key for the OP is what was on the 2nd loan application he closed right after the first, if the the other loan payment, or lien or debt was disclosed then there was zero fraud and has nothing to worry about.

[berniefergie]

Defraud was not in our minds. We are not that kind of people. My wife wanted to run her own business. This was the only way as far as we knew to get it. We took a very big risk which is the way to make big money in this country. Thank you for all your responses. We are going to file tomorrow. At least the phone calls can stop. Wish us luck.

[mysticspirit25]

Not saying it was, but what was on the second loan app, was the prior loan debt just incurred on the app you signed at closing? If it was, you have zero, to worry about. I do wish you luck. I think you will be fine. 4 years of payments shows that you did not intentionally defraud, I think mortgage lenders are going after bigger fish to make examples of, mostly in Nevada that did stuff like that and took out loans in excess of 1M.

[OhioFiler]

Defraud was not in our minds. We are not that kind of people. My wife wanted to run her own business. This was the only way as far as we knew to get it. We took a very big risk which is the way to make big money in this country. Thank you for all your responses. We are going to file tomorrow. At least the phone calls can stop. Wish us luck.

I don't believe you intended to defraud a lender. You did however, misstate material facts on one or both applications. That would be construed as fraud if the issue was pushed.

It won't be pushed. Good luck.