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I was trying to refinance my primary home mortgage back in July 2012. Things were going well until the deal went south because the lender required the original note from my secondary mortgage company to "re-subjugate" the second mortgage. I've been waiting over 2 months and they still cannot produce the note. I am considering finding a lawyer to get this mess straightened out. Has anything like this happened to anyone else? If it's relevant, this is in Ohio.

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congrats! you dont have to pay your 2nd mortgage

74ak said:   congrats! you dont have to pay your 2nd mortgage

He's kidding, but he may be right. Your answer may be to have a lawyer draft a letter that if they can't produce the note, you will cease making payments. IANAL but check into it.

Have you contacted the 2nd mortgage lender directly?
I had a few hicups on my refi, mostly due to how swamped they where to have the 2nd HELOC suborginated.
It took about 2 months untill I finally recived the approval.
My suggestion is to hound them untill they get it done.

Agreed. Time to stop paying. Demand proof of the mortgage. I suspect they'll find it then.

Right, I would have the lawyer go through the motions to remove the second mortgage from your property records.

Most of the responses I hope are just kidding. Obviously 2nd lien holder needs to get on the ball as they are making your life more difficult than it should be in terms of getting a refinance and I suspect floating the aforementioned idea out there would get them on the ball more quickly, even if it's just to get them moving.

Rajjeq said:   74ak said:   congrats! you dont have to pay your 2nd mortgage

He's kidding, but he may be right. Your answer may be to have a lawyer draft a letter that if they can't produce the note, you will cease making payments. IANAL but check into it.

I imagine the 2nd mortgage was recorded, in which case you cannot just stop paying it.

you COULD however, sue the 2nd mortgagee if they cause you to lose the refi due to their failure to supply the note.

Kidding? Not at all. If the lienholder can't prove a loan exists then steps should be taken to settle or remove it . Its hindering his ability to refi so he has Damages.

You can probably get a large discount where they never produce and you pay a small percentage of what's owed

I very much appreciate it's hindering his ability to refi and the 2nd lien holder should fix it, but I'm sure he would acknowledge that he owes $ for the 2nd mortgage.

His damages aren't the value of the 2nd mortgage.

His damages may exceed the entire value of the 2nd mortgage.

if the first mortgage is 300k at 6% and 2nd was 15k at 8%, and they blocked a refi of the $300k loan down to 3.5% his damages could be well over $15k.

regardless of the numbers, as I mentioned the goal, if they cannot prove the loan, would be to settle for a percentage of the 2nd mortgage to release the lien, and be rid of the 2nd lien.

Get a lawyer

skagen said:   I very much appreciate it's hindering his ability to refi and the 2nd lien holder should fix it, but I'm sure he would acknowledge that he owes $ for the 2nd mortgage.

His damages aren't the value of the 2nd mortgage.


How can you say that?

What if a refi is all the OP needs to prevent foreclosure?

Fair enough.... damages could exceed the 2nd mortgage size in both scenarios above.

I guess I reacted more to the premise of trying to weasel out of paying ones incurred, valid debts. It feels like these days the level of scruples everywhere seems to be waning.

That said, good luck in getting your refinance however it needs to happen.

Don't stop paying but find a lawyer that is good in RE law because they will ruin your credit but you could easily get out of a good portion of that second with a good lawyer.

Don't almost all states have a relatively simple lost note affidavit or similar process, where the bank doesn't have to produce the original note if they have indeed lost it? I would think banks are well prepared to deal with this. You might get a small reduction in the debt for nuisance value, but the cost of your lawyer might make it a zero sum game, if that. And you'd probably need to carefully read all your loan docs. It is likely you waived your right to all kinds of damages, including consequential which could cover a lost refi opportunity. But I'd be interested to know how it turns out.

Triangles95 said:   I was trying to refinance my primary home mortgage back in July 2012. Things were going well until the deal went south because the lender required the original note from my secondary mortgage company to "re-subjugate" the second mortgage. I've been waiting over 2 months and they still cannot produce the note. I am considering finding a lawyer to get this mess straightened out. Has anything like this happened to anyone else? If it's relevant, this is in Ohio.

They need to "re-subordinate" the existing second mortgage. Really, what they need is a subordination agreement that needs to be filed with the county that says the second mortgage holder will allow your new mortgage to go into first position. I really dont understand the difficulty unless they are trying to give you the run around because they for some reason think its not in their best interest for you to refi.

When I worked in the mortgage business, I did refinances we were subordinated the existing second mortgage hundreds of times. It was always ok for me to have a "copy" of the note. There are many places where you might be able to get a copy of the note: your own settlement documents, the second mortgage title company, the county registrar, etc.

The second mortgage holder is not obligated to agree to subordination and in those cases, I would just refinance the second mortgage at the same time as well.

bpp said:   
The second mortgage holder is not obligated to agree to subordination and in those cases, I would just refinance the second mortgage at the same time as well.


That's correct. I know there were several banks that were doing that. It was one way to get out of the second mortgage business as many of them got routinely wiped out if the property ended up in foreclosure or if there was a short sale they were usually forced to take very little or risk getting wiped out in the foreclosure. So the second mortgage company could always take the position that they don't agree to subordination.

inda said:   Get a lawyer


One who is knowledgeable about these types of issues and is licensed to practice in the state you live in.

any updates?

Also curious of the outcome.



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