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Guest

I have two mortgages and I went through foreclosure several months ago but was able to get my loan with my first mortgage reinstated. The second lein holder immediately charged off my loan with them and won't negotiate at all. What are the rights of the second mortgagor and what are the possible repercussions if I continue only to pay my monthly payment with my first mortgage?

evolovik26 · Posted: Fri Aug 17, 2007 10:40 am Post subject:

A second mortgage holder cannot do anything but wait ( unless they are the same bank ) they are in the second position and therefore cannot initiate foreclosure untill the first mortgage calls the loan due or they are in first position ( first motrtgage been paid off ). However expect your second mortgage to charge off and your credit will be hurt significantly. You will likely never will be able to purchase another home and will continue incurring late fees and interest on your second mortgage. In addition if you ever attempt to sell or refinance the home they will come and collect the ballance you owe them before you get your money.

colin · Posted: Fri Aug 17, 2007 12:50 pm Post subject:

Hi Gaskill & Eugene,

Welcome to Mortgagefit forum.

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Gaskill,

As the second lien holder has charged off the loan, it means that you no longer have to pay for the outstanding debts towards the second loan. But the lender may inform this to the IRS and you may have to pay the income tax on the amount of the forgiven debt. To know more on the consequences after a loan is charged off, please refer to: http://www.mortgagefit.com/foreclosure/charge-off.html

Guest

In regards to the information given about the charge off, you DO still have to pay for your outstanding debt. A charge off is an accounting function that affects the company internally. The mortgage company is basically taking a loss on your bad debt, since you are not paying. You receive a 1099-C at the end of the year, and have to claim the entire amount as income.

You still owe the debt, they will still come after you, and they can still refer you to outside collection agencies who will pursue payment.

Also, the second lien holder can and will foreclose on you for non-payment if foreclosure is warranted. The second lien holder will complete a financial analysis and review the expected return due to them. If the return qualifies under their guidelines, they will commence foreclosure, pay off your senior lien, and take title to your property.

In this case, since they charged off your second lien, they have already made the determination that foreclosure is not warranted.

When you choose to sell your home, the second lien holder still has a lien on your property, and you will need to satisfy both the first and second lien in order to sell.

If your first lien goes into foreclosure, and the bid amount at the sale is not enough to satisfy your total debt, it will create a deficiency balance which you may be liable to pay, depending on your state law.

You would still be responsible for the 2nd lien, regardless of the foreclosure as you signed under the terms of the note.

Hope the info helps!

Guest

Hi. my morgage is in charge off status and the morgage company said that if i pay somthing a month . they will not foreclose on my home. Can i trust that? The morgage will not give me the agreement in writing, but the said i can keep my home. What can i do?

gmakerley · Posted: Wed Jan 20, 2010 11:37 am Post subject:

you have two options - do what they've suggested and hope they back up their word with deeds; or do nothing and let them foreclose.

as long as you've got proper receipts for payments made, or canceled checks or some other documentation, you can't be hurt. that is, unless you're heading for foreclosure no matter what happens. obviously, all the payments they'd be looking for would have to arrive or else they'd begin the foreclosure.

Posted: Thu Oct 20, 2011 3:01 pm Post subject:

if the lender charges the loan off and you get a 1099c, well yes there is a tax consequence but if this is the case, then the lender can not pursue the debt any longer as the gain has to be settled with the IRS. Therefore, how is the lien removed from title?

jameshogg · Posted: Thu Oct 20, 2011 10:34 pm Post subject:

Hi Guest,

You need to get the lien release certificate from your lender itself. No one else can give you the lien release certificate.

Thanks

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What do I do if my second mortgage is in charge off status,