Buying home back through redemption in MI w/ PNC

[mondain86]

What is the name of your state (only U.S. law)? Michigan

I took a mortgage out to purchase my home brand new back in 2004 in an older run down neighborhood through national city at the time now pnc. I have one mortgage for 105k and one for 20k (installment loan) still owed. I believe this is called an 80/20 mortgage to get out of the PMI. My home value through zillow is about 70k which is 55k under water. All the houses around me show for 15-35k on zillow.
My question is if i stop paying and let it go into foreclosure how will that affect my 2nd mortgage with the property? Can it technically even get bought back since it is considered an installment loan? I do have money i have been saving looking to just walk away from this house as property taxes keep going up and raising my payments. I'm hoping i have enough saved to be able to buy it back after the sheriff sale foreclosure during my redemption period if the price is right. My concern though is with the second mortgage and what happens with that? Any and all information is appreciated thanks.

 

[OHRoadwarrior]

The second mortgage is a lien on the property also and must be addressed.

 

[justalayman]

You also want to understand Michigan is not a walk away state. The creditor can seek a judgment for the deficiency between what you owe and what the foreclosed property sells for.

 

[ticked-in-OK]

Hi there - just out of curiousity, have you checked into PNC's new plan for Hardship to prevent forclosure? Mite be an option for you there. Also, you might consider refinancing into 1 monthly mortgage payment. I know PMI is a real bugger, but considering what you are paying for both payments with interest, there might not be such a big difference but you can always pay down the principle with what you have saved to eliminate it faster? Just a thought.

 

[mondain86]

yes i understand Michigan is not a walk away state. I've know personally 4 people within the last year - 5 years years redeem their house back and the bank did not take any action against them, but none have had the 2nd mortgage. I understand it could happen but after speaking with a couple lawyers about BK they said it is rare in Michigan as our economy is so messed up. My only real concern is the 2nd mortgage and how i would address dealing with that? I'm not sure if the bank makes an offer with me or if i can get the deed if i buy back with redemption without dealing with the second mortgage first. just totally clueless on whats involved with the 2nd mortgage aspect of this

 

[mondain86]

Hi there - just out of curiousity, have you checked into PNC's new plan for Hardship to prevent forclosure? Mite be an option for you there. Also, you might consider refinancing into 1 monthly mortgage payment. I know PMI is a real bugger, but considering what you are paying for both payments with interest, there might not be such a big difference but you can always pay down the principle with what you have saved to eliminate it faster? Just a thought.

Yes i have checked into PNC hardship plan about a year and half ago. wrote them my letter and showed them what my house is now worth and my income level dropped but they said i still did not qualify for anything. And since it is not through Fannie Mae or Freddie Mac i am not eligible for the interest rate reduction

 

[nanu156]

ugh...

Ok, so... Your mortgages are liens on your home.

How this works, first the first mortgage holder gets their money, then they release the lien on the property... Then the second mortgage holder gets paid then they release their lien.

In the event that the first lien gets cleared the second lien moves into first lien position.

If you were to foreclose, and then go to buy the home with cash, it is likely that the bank(s) involved would seek judgement then lien your property for the diffencies. This kind of thing really pisses off banks...

Your best bet, if you are not going to be good to your word and pay the money you PROMISED to pay, is to file a BK. The BK would wipe out the mortgages and wont be any better/worse then the foreclosure.

I think this is wrong, and do not condone people not paying on their mortgages because it isn't fun, or because it's no longer the roaring 90's where everyone is getting rich on property ownership...

but legally a BK would make the most sense. Chap 7 preferably. If you don't qualify for a Ch7 then you should keep paying on your house, because you can afford it and it's the right thing to do, its what you promised to do the day you got your mortgage.