Interstate TD Investments Zombie Second Mortgage Foreclosure Defense

As their name suggests, Interstate TD Investments offers holding and investment services, including first and second mortgages. The company has been in business for approximately 20 years, having been established in 2003. Interstate TD Investments only has one location in Ventura, California, but they do business throughout the country. The company generates approximately $436,477 in revenue annually and there are approximately seven people employed at their single location.

Interstate TD Investments is a legitimate company, but that does not mean that they always treat their clients and customers fairly, or that they are always honest. Interstate TD Investments has been the subject of many lawsuits regarding wrongful foreclosures of first and second mortgages. If you have been notified that Interstate TD Investments is filing a zombie second mortgage foreclosure against you, it is critical that you obtain legal advice. Below, our Fort Lauderdale foreclosure defense lawyer explains more.

What are Second Mortgages?

There are many reasons people take out second mortgages on their homes. Often, borrowers use them to fund an initial down payment on a home. Supplementing savings for a down payment can allow homeowners to obtain a better price on their first mortgage. Larger down payments can also eliminate the need to purchase property mortgage insurance, which is now required by many agencies. Debt consolidation, remodeling the home, or financing post-secondary tuition are just a few other reasons why people take out second mortgages.

Both first and second mortgages are secured by the same assets, the home or business property. Second mortgages, though, typically have a higher interest rate. The amount of a second mortgage will depend on the difference between the current value of the home, and the amount owed on the loan. This is known as equity.

Second mortgages also typically have shorter terms than first mortgages. While a first mortgage may have a term of 30 to 40 years, a second mortgage may have a term of anywhere between 1 and 20 years.

Can Second Mortgage Holders Foreclose on a Home?

As the holder of a loan, companies such as Interstate TD Investments can foreclose on a home if the second mortgage payments are not kept current. However, it is harder for holders of second mortgages to recover the debt than first mortgage holders. This is due to the fact that second mortgages are in a junior position, meaning the first mortgage must get paid first. As such, if the home is sold in a short sale and the proceeds are not enough to fully cover the debt of the first mortgage, the holder of the second mortgage can file a lawsuit against the homeowner to recover the debt.

Additionally, it is important to know that second mortgage holders such as Interstate TD Investments can foreclose on a home even if the first mortgage is up to date with payments. In cases such as these, the second mortgage holder can file a lawsuit against the homeowner and the proceedings will be very similar to that of a foreclosure on a first mortgage.

What are Zombie Second Mortgages?

While many people have heard of zombie foreclosures, zombie second mortgages are quite different. A zombie foreclosure refers to when a homeowner has been notified that the mortgage lender or servicer is going to foreclose on the home. Believing they have no way to repay the loan and seeing foreclosure as an inevitability, the homeowner simply leaves the home. Sometimes, these foreclosures proceed and in other cases, they do not.

Zombie second mortgages are quite different and they started to become more of an issue during the Great Recession. When the housing market collapsed in 2008, many homeowners were not able to make their mortgage payments. Millions of homeowners found themselves with an underwater mortgage, where the value of the loan is greater than the market value of the home. Lenders realized that due to the low value of the homes, there was no point in foreclosing. They then sold bundles of second mortgages to other lenders and companies such as Interstate TD Investments.

Despite the fact that the Truth in Lending Act requires financial institutions to notify homeowners when their loan has been transferred to a different company, this did not happen in many cases. The Truth in Lending Act also requires any holder of a first or second mortgage to provide borrowers with regular statements regarding their mortgage loans. This also did not occur.

As such, many homeowners were led to believe that they were still obligated to repay their second mortgages. Once the value of homes started to increase again, the holders of these second mortgages then started foreclosure proceedings against homeowners. It is due to the fact that these loans are seemingly ‘rising from the grave,’ that they are known as zombie second mortgages.

What to Do if Interstate TD Investments is Threatening Foreclosure on a Second Mortgage

If you have received a notice of default or notice of foreclosure from Interstate TD Investments, the first thing you should do is speak to a Fort Lauderdale foreclosure defense lawyer. There are many defenses that can be used in these cases. The statute of limitations, or the time limit in which the company had to file a lawsuit, may have expired.

Or, Interstate TD Investments may not be able to prove that they own the loan, particularly if they have purchased it from another company, which is likely. These are just two of the most common defenses that arise in these lawsuits, and a lawyer can advise on the best strategy for your case.

Call Our Zombie Second Mortgage Defense Lawyers in Fort Lauderdale for Legal Help

If you have been notified that Interstate TD Investments plans to foreclose on your second mortgage, you need legal help. At Loan Lawyers, our Fort Lauderdale zombie second mortgage defense lawyers can provide it and give you the best chance of a favorable outcome. Call us now at (954) 523-4357 or contact us online to request a free consultation and to learn more about your legal options.