The Good, Bad and the Ugly of 2nd Mortgages in Minnesota

If you are one of the thousands of Minnesota homeowners who took out a 2nd mortgage a few years ago during the real estate boom in order to avoid private mortgage insurance, that decision could end up costing you if you lose your home in foreclosure. The issue is that a few years ago lenders in Minnesota seldom pursued homeowners for the deficiency owed on a 2nd mortgage when a home went into foreclosure. That is not the case anymore, lenders are aggressively pursuing individuals and obtaining judgements for most 2nd mortgages in Minnesota. I have seen numerous clients who owe a lot of money for the 2nd mortgage that was taken out to avoid PMI because they did not have a 20% down payment. In some cases these clients owe very little other debt, besides the 2nd mortgage. In the end the homeowner was able to buy a home without paying for PMI with the 2nd mortgage, the bad is that the housing market crashed leaving many homeowners underwater on their homes, and the ugly is that if you get a judgement, your only way out of the debt may be a bankruptcy. If you are being sued on a 2nd mortgage you need to speak with an attorney to advise you regarding your rights.