Possible Foreclosure of First and Second Mortgage, Who Do I Stop Paying

[Ramsey01]

My question involves a foreclosure in the State of: Michigan


My husband's pay was just cut over 30% and we are not going to be able to keep our heads above water to much longer. As of right now was are current on both our first ( GMAC) and second (SLS). We have to house listed for sale but nothing much happening in this area. If the house sold for what we are asking we would be able to pay off the first without any problem and 1/2 of the second. What mortgage should we not pay if it comes to that?

We were thinking that if we had to stop paying one of them the second would be the best as if they foreclosed they would want to protect their interest where as if it was the first they would come out way ahead an not care about the second

Any advise would be very helpful.

[flyingron]

I'd be contacting the second and trying to negotiate a short sale. However, they're not usually inclined to do so if you are current on the payments. You would be opening yourself up for a breach of contract suit if you accepted offers and not be able to deliver title. Hopefully you put language into any purchase contract that the offer is contingent on SLS accepting the short sale.

[jk]

and be aware, that unless the lender specifically releases you from the debt, a short sale does not remove your liability for the remainder of the debt.