Remember the subprime mortgage crisis of the early 2000s? One toxic product that contributed to the crisis was the “80-20 mortgage,” where homeowners took out a first and second mortgage simultaneously. When the housing bubble burst, these second mortgages, often held by investors, became worthless. Many homeowners, understandably, believed these second mortgages were dead and gone. They were wrong.
Now, two decades later, with rising property values, these “zombie second mortgages” are being resurrected so investors can collect on the long-dormant loans. Families who thought their housing situations were stable are now facing devastating surprise foreclosures, and families are being thrown into crisis.
A Massachusetts Bill provides a crucial lifeline for these homeowners by targeting the predatory practices of zombie second mortgage investors and protecting homeowners from unfair and deceptive tactics.
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