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Do I need to pay for second loan even after charge off?

Posted on: 22nd May, 2006 03:36 pm
i was recently in foreclosure (twice) and during the first round, i received a 1099 (cancellation of debt) for my second mortgage. i was just recently hit with back taxes for not reporting this. my mistake. however, in looking to refinance my home, my lender that charged this off now says that i need to pay this in order to get a clear title. so, am i responsible for both the loan and the taxes?

help!
filing bankruptcy won't clear all your dues. the lender will still hold the lien on the property though you file for a bankruptcy. you will have to pay off the dues to the lender as per your payment plan. if you file chapter 7 bankruptcy, then you will have to reaffirm the loan and pay it off. if you do not pay the dues, the lender will foreclose the property. moreover, a bankruptcy does not discharge the back taxes. you will have to clear your back taxes.
Posted on: 14th Oct, 2009 01:39 am
My mortgage company charged off my loan and said I do not have to pay until someone picks up the loan. Right now I have noone to pay no way to pay if I did either but I was not told anything of having to pay any type of tax other than property tax. I have no idea what is going on or what this really means. Can you explain exactly what I should expect?
Posted on: 26th Oct, 2009 06:28 pm
Hi cynthia,

Your lender has charged off the loan. This means that your lender is no longer interested in collecting the dues from you and has sold off your mortgage to a collection agency. The collection agency will in turn collect the dues from you. To know more about charge off, check out the following page:
http://www.mortgagefit.com/know-how/secondloanchargeoff.html

Thanks
Posted on: 26th Oct, 2009 10:16 pm
OK Mike! What if I am moving in 5-10 years? What happens to the cloud?
Posted on: 04th Nov, 2009 09:07 am
i disagree in part with what you've said jameshogg. a charge off is a financial action on the lender's books, indicating that they don't anticipate receiving payment on the loan. it's not that they're no longer interested in receiving payments; it's that the borrower hasn't paid in such a while that they figure it's a lost cause to expect any further payments.

the money is still owed, and they may not have sent the account (yet) to a collector.
Posted on: 04th Nov, 2009 12:21 pm
we are behind in our second mortgage as i am paying for 2 separate residences.i am renting in a different state due to only job i could get and wife is in home that has 2 mortgages. are you a lawyer? is the above really true i wouldn't be responsible to pay off mortgage(2nd) due to a charge off given to me and no collector would be involved later down the road to put a wage deduction on me? or judgement? where have you gotten this information from? my home is in fl.
Posted on: 15th Dec, 2009 07:35 pm
Hi arturo,

Though your second mortgage is charged off, you would still be responsible for paying off the amount to the collection agency. If you do not pay off the dues to the collection agency, they can sue you for the debts.
Posted on: 16th Dec, 2009 09:27 pm
I did a loan modification
The bank lowered my interest rate from 10% to 6% for the life of the loan. Someone at the IRS said that the bank can now 1099C for difference between the the 10% and the 6% for the life of the loan. This could tax me on $60,000....how did this help me? Is this true or not?
Posted on: 21st Jan, 2010 06:07 pm
I agree with Mike. The 2nd is charged off and you received a 1099 and paid taxes. That is it. however they will sell your bad loan as part of a larger portfolio to a collection agency and they may try to collect. If the statute of limitations has expired they have no recourse and can not sue you. So if you are in this situation tell them to eat crap. Chekc your credit report and ensure that the bad loan only stays on it for 7 years. Your bad loan will be sold and resold and each one of these collection agencies will try to collect. When you do not pay they will eventually charge it off and then resell it. They will report to the credit agencies regardless of dates. They have no clue what they bought in the first place.
Good luck. This is an area that nobody is paying attention to and very little regulations
Posted on: 03rd Feb, 2010 11:58 am
i am current with my 1st mortgage. i could not pay to my 2nd mortgage bank over 20 months. i am in newyork. i filed for chapter 7 bankruptcy in 2007 and was discharged in 2008. my 2nd mortgage bank approved my loan for a charge off in 2008, sold it to a collection agency, however, collection agency returned it back to the bank after 7 months. so it is back with the same bank. my 2nd bank served me with foreclosure notice about 6 months ago. when i talked to the bank representative he said sale date is set in may. can you please suggest what i shall do now or what my can do to me? thanks.
Posted on: 28th Feb, 2010 09:11 pm
Lender can either issue a 1099, for which they get a tax credit from the IRS. or they can pursue you for a deficiency. It's either or and not both. I highly sugget you talk to your CPA or a tax attorney to help with this matter. Your lender is trying to double dip!
Posted on: 04th Mar, 2010 04:25 pm
I tried to get a loan modification with my lst.mortgage company but they said that my loan had been charged off. I am paying the second mortgage company payments and my past due property taxes. I need home owners insurance also. My income is fixed and I can"t afford to pay everthing. Which is the most important thing to pay?
Posted on: 23rd Apr, 2010 11:37 am
Hi mary,

Your mortgage dues, property taxes as well as home owner's insurance are all important items and all of them needs to be paid on time. If you miss out on any one of them, you can sued for it and there can be a lien placed on your property. You've mentioned that your first mortgage has been charged off. In that case, the first lender will not collect the dues from you. Rather a collection agency will contact you and collect the debts.

Thanks
Posted on: 24th Apr, 2010 01:25 am
Helping_user: Your post regarding Loretta still being obligated to pay the 2nd mortgage may not apply if she's in California. California is a purchase money loan state, which means if the 2nd mortgage was used to purchase the property (as opposed to being taken out after the property was purchased), AND the property is her primary residence, the 2nd mortgage company can not come after her for a deficiency judgment once the house has been foreclosed on -- only the property in this case can be used as collateral for the loan.
Posted on: 26th Apr, 2010 12:10 am
late. but, mike is right. if you get a 1099 from the lender, they are reporting that your debt is forgiven and that you need to claim that amount essentially as income and pay taxes on it. if you do this, you are not responsible to repay the debt. there also legally shouldn't be a lien if a 1099 was issued. 1099 are usually only issued once an agreement has been reached. act accordingly.
Posted on: 06th Jul, 2010 02:05 pm
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