Which lender pays foreclosure costs?

Question

I have a 1st and 2nd mortgage and am in process of trying to complete a short sale. I lost my job so I am unable to continue to make payments. I am about 70-80k upside down in equity. I was curious as to which lender has to pay foreclosure costs if it comes to that, the 1st or 2nd mortgage company?

Answer 1

If your home is foreclosed on, the 1st mortgage is paid off first, with any extra money going to the 2nd mortgage.  The foreclosure costs are paid by the company who did the foreclosing.  Those costs include their attorney's fees, court costs, etc.  Either way, even after the foreclosure, both companies they can come after you for all the money that is owed them.  Since it is no longer secured, it is due and payable immediately.  They can take you to court to get a judgement to pay all that you owe.  Try to come to some agreement, and find a job (ANY JOB) NOW!!