Posted on: 28th Apr, 2008 01:57 pm
My home was foreclosed by the 1st lender Dec 2007. It has a 1st and 2nd mortgage. I recently got a letter from a collection agency that they are collecting on behalf of the 2nd lender. Is it possible that a HELOC which is a secured loan be sold/assigned to a collection agency. Shouldn't it be that the original HELOC creditor be pursuing a deficiency judgement.
I am presuming that the lender charged it off and sold it to a collection agency. Is it legal? THanks in advance for your input.
I am presuming that the lender charged it off and sold it to a collection agency. Is it legal? THanks in advance for your input.
Hi rd,
Welcome to the forum.
Even if the lender charged the debt off he can sell it to the collection agency. Charged off does not mean that the lender gas forgiven the debt. So you are liable to pay it.
Now have not you contacted with the second lender after foreclosure and tried to pay him off?
Welcome to the forum.
Even if the lender charged the debt off he can sell it to the collection agency. Charged off does not mean that the lender gas forgiven the debt. So you are liable to pay it.
Now have not you contacted with the second lender after foreclosure and tried to pay him off?
Hi Rd,
I haven't heard of a mortgage been sold off to a collection agency. But what I can tell you is, because your first loan has been satisfied and the home has been foreclosed, so the second lender no longer has an interest in the property. That's the reason he is treating the Heloc as an unsecured debt and has sold it off to a collection agency.
Thanks.
I haven't heard of a mortgage been sold off to a collection agency. But what I can tell you is, because your first loan has been satisfied and the home has been foreclosed, so the second lender no longer has an interest in the property. That's the reason he is treating the Heloc as an unsecured debt and has sold it off to a collection agency.
Thanks.
can the second mortgage follow the borrowers if the house has been foreclosed, even if it is a private recorded second that doesn't report to the credit bureaus?
Hi KT,
Welcome to the forums.
Is it a silent second that you're talking about?
Welcome to the forums.
Is it a silent second that you're talking about?
Hi Sara,
If by a silent 2nd you mean an unrecorded second, no, it is recorded with the county. What I am wondering is if the value has dropped and the first mortgagee forecloses with no funds to pay the second will the debt still be attached to the borrower and not the house?
Thx,
If by a silent 2nd you mean an unrecorded second, no, it is recorded with the county. What I am wondering is if the value has dropped and the first mortgagee forecloses with no funds to pay the second will the debt still be attached to the borrower and not the house?
Thx,
Hi KT,
Welcome to the forums.
I think that depends upon the loan terms and your state laws. You have taken the second mortgage. So you are liable to pay off the due amount. Otherwise the second mortgage lender can place lien on your other properties or sell to the collection agencies. So better try to pay it off.
Best of luck,
Larry
Welcome to the forums.
I think that depends upon the loan terms and your state laws. You have taken the second mortgage. So you are liable to pay off the due amount. Otherwise the second mortgage lender can place lien on your other properties or sell to the collection agencies. So better try to pay it off.
Best of luck,
Larry
Hi KT,
Welcome back.
If the second mortgage is a recourse loan, then the lender can take come after your assets in order to retrieve the money he has invested.
In which state is your property located? Depending upon the state laws, you may or may not have to pay any deficiency judgment, if any filed by the lender.
Hope this helps...
God bless you.
Samantha
Welcome back.
If the second mortgage is a recourse loan, then the lender can take come after your assets in order to retrieve the money he has invested.
In which state is your property located? Depending upon the state laws, you may or may not have to pay any deficiency judgment, if any filed by the lender.
Hope this helps...
God bless you.
Samantha
