Posted on: 26th Dec, 2009 04:26 pm
the first and the second are both owned by the same bank. the house went through foreclosure and the bank kept the house. now, just shortly after the auction we are getting a demand letter for the second. this is idaho. the money from the second was put into the house for improvements. the house was appraised for way more than the balance of the first and second at the time of getting the second. the house originally had a first mortgage, then a second mortgage to make an addition on the house, and then the second was refinanced to finish the addition and an appraisal was done at the time. the house had been on the market for several months to sell but not one offer in this market, stopped paying on it so that a short sale could happen but never got any offers. we have another house that we chose to stay in because of remarriage at the time all this was happening, have paid all of our other bills just fine, but let the house go in hopes of selling it, no way out of it and not enough income to support both payments, job losses, etc. so we have consulted a lawyer but were told that because of the foreclosure it made the second a personal loan. so what happens now?
The second mortgage lender has the rights to collect the dues from you. If you are unable to pay your second loan, the lender will either garnish your savings account or your wages or he may send the second mortgage to collections. The collection agency will in turn collect the dues from you.