I have a client in short sale with a 1st mortgage, a home-equity line of credit, and a third lien. As we've been working through the process of getting his home sold, I've had to help him keep up with whatever he can. I had to do some research and learn a few things myself so I can be there for him and help him find his way again! As I searched different areas, I found this interesting article that I thought would be good to share with you all. Have a great weekend.

by Attorney Stephen R. Elias

You may be able to stop paying some of your home loans without risking foreclosure. Here's how.

If you're like many homeowners, your home may be encumbered with a second or third mortgage (or deed of trust), and perhaps a home equity loan. You may be able to avoid foreclosure if you are having trouble making all your mortgage payments, by paying the right loan and either stoping payments or making reduced payments on the rest. In almost every case, your first mortgage or deed of trust is the right loan to keep current.

Although stopping payment of loans secured by your home is usually a last resort, if you can do so safely (that is, without risk of foreclosure), thereby leaving you with more money to pay the one or two lenders that could foreclose on your house, this strategy could keep you in your home. (To learn about other strategies to deal with the threat of foreclosure, see How to Avoid Foreclosure and How Bankruptcy Can Help With Foreclosure.)

Here's how it works.

Mortgages and Foreclosure: The Basics

When you originally took out the loan to buy your home, you agreed to have the loan (or loans) secured by a mortgage or deed of trust. This gives the lender a lien (legal claim) on the property. If you fail to comply with the payment terms of the loan, the lender can enforce its rights by foreclosing on your home. In foreclosure, the lender sells your home in order to recoup the money you owe under the mortgage.