Representing Businesses and Individuals in Chicago and Northern Illinois

Can A Second Mortgage Lender Foreclose On Your Property In Cook County?

If you are like many people who purchased a home many years ago and were able to enjoy the significant financial benefits of the housing bubble, you may have taken out a home equity loan, which is commonly referred to as a “second mortgage.” This type of loan is junior to the original mortgage, and it uses the homeowner’s available equity in the property as collateral to secure the loan. Under certain circumstances, the lender who provides a second mortgage may initiate a foreclosure. This may occur if for some reason you have defaulted on the second mortgage yet are still current on the primary mortgage.

A secondary mortgage holder will not typically pursue this course of action, due to the fact that the lender for the original mortgage has the primary right to be satisfied in the event of a foreclosure. In other words, even if the secondary lender were to carry out a foreclosure and to sell the property, most or all of the proceeds would usually go to the original lender. This same principle applies in cases where the original lender is the one that foreclosed on the property: since a large percentage of borrowers – and especially those who go into default on their loans – have underwater mortgages, the proceeds of the foreclosure sale will not often be great enough to pay the second mortgage holder much or even anything.

How A Chicago Foreclosure Defense Attorney Can Help

Unlike some cases, Illinois does not categorize second mortgages as non-recourse loans. This means that if you lose your home to foreclosure, the home equity lender may have the right to pursue you for a deficiency judgment to enforce payment on the remaining balance of your second mortgage. Fortunately,  Whiteman Law, in Cook County, may be able to help you avoid this outcome by taking the case to court to contest the action.

If it can be proven that there were mistakes in the loan document or that you have been the victim of some type of lender fraud, we may be able to have the action dismissed in court. Alternatively, we might be able to negotiate on your behalf for a settlement of the debt for less than you owe.

The key to success in the situation is to contact us as early as possible to get started on the case. Call us at 312-655-1000 or email us.