Gomez & Simone Law Firm Finds New Ways to Help Clients With Junior Mortgage Foreclosures - Part One
Los Angeles, CA, November 15, 2018 (Newswire.com) - Los Angeles Real Estate Attorneys Gomez & Simone, APLC, specialize in foreclosure defense, bankruptcies, estate planning, real estate purchases and sales, quiet title, landlord-tenant issues, and partitions. The firm is now announcing assistance to homeowners having issues with Junior Lien Mortgages (i.e. HELOCS, 2nd mortgages, 3rd mortgages, etc.). These kinds of secured loans place liens against a homeowner’s property subsequent to their initial mortgage.
Lately, the firm has seen a massive increase in foreclosures by junior mortgage lenders. New clients are coming to the firm complaining that they have just received default notices or acceleration letters demanding huge lump sum payments for loans that they had completely forgot about or had thought were forgiven.
The reason that this situation is on the upward swing is that homes have been steadily rising in value since the great recession at the tail end of the 2000s, and now have equity. If a house was underwater, Junior Lenders would not dare foreclose because they could not collect a penny on their loans. Now that homes have reached the point where there is EQUITY - where the market value of the home exceeds the amount owed on all mortgage loans - these Junior Lenders are coming out of the shadows to foreclose on their borrowers. In many cases, this is terribly unfair to the homeowner because these Junior Lenders stopped sending bIlling Statements to their clients years ago, sometimes over a decade ago. Stuart R. Simone of Gomez & Simone has coined the phrase “Stealth Seconds” to describe this situation.
Many of the cases are complex legally, as the California Homeowner’s Bill of Rights (“The HBOR”) ONLY applies to FIRST mortgages, and thus does not apply to foreclosures by Junior Lenders.
The Los Angeles foreclosure attorneys at Gomez & Simone have done extensive legal research to find the rather obscure laws that can protect homeowners in these dire straits. We have not seen any other articles on the topic from other law firms, and there have been few if any published cases, so Gomez & Simone is breaking new legal ground, just as we did in 2013 when the HBOR became effective and G&S had the first injunction in Southern California, Appellate Court Victories and quickly became known as the HBOR experts.
This first article in a series applies to the “easier” situation where the property is underwater, but we will delve into other situations in later articles.
In the state of California, the “Senior” lien holder on a home is usually the lender for the original mortgage (the “purchase money loan”), the lender of a refinance of that loan. These have traditionally been the ones to initiate foreclosure, as they are generally first in line to receive the proceeds from the foreclosure auction. The junior lien holders are paid out of the remaining money. Many homeowners have more than one “Junior mortgage” lien. In those cases, the various junior lien holders are paid based on the time recorded for each individual loan. And Junior Lien Lenders have traditionally rarely foreclosed, because (1) they won’t be paid if the house is underwater, and (2) even if there is equity, once they foreclose they then need to pay of the Senior Mortgagees if they wish to control the property.
Bankruptcy law allows a homeowner to file a Chapter 13 bankruptcy case and eliminate these junior liens in some cases. This is often utilized by California homeowners who owe more on their mortgages than their homes are worth. Gomez & Simone have worked so that their clients do not have to pay their junior liens.
“Foreclosure and bankruptcy can be very scary, but we’ve helped many clients get through it. We can work to eliminate junior mortgage liens and find the right solution for your situation,” said attorney Mark A. Gomez.
Mr. Gomez went on to say that not every homeowner facing foreclosure would be able to strip their junior mortgage liens, but if it is possible, paying one mortgage every month as opposed to several can make all the difference.
This news release is not meant to be used as legal advice. For more information about eliminating junior mortgage liens, or to make a press inquiry, please contact Gomez and Simone Law, located at 3055 Wilshire Blvd. #1200, Los Angeles, CA. 90010. They can be reached via phone at (855) 219-3333.
Source: Gomez and Simone Law
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