Posted on: 23rd Jun, 2011 12:05 am
I had a 1st and 2nd mortgage with the same company, Suntrust Mortgage. After defaulting on both loans, Suntrust did a loan modification with me on the 1st and the 2nd was paid off by United Guarantee Insurance Co. It appears that Suntrust filed a claim to the insurance company and was paid in full on the 2nd mortgage. Do I have to pay the insurance company back the money that they paid Suntrust Mortgage for the 2nd?
Hi calvin,
As far as I know, private mortgage insurers have the right to file deficiency judgments. And they do where it is legal and the situation allows them. Thus, there are chances that the mortgage insurer will come after you for the money.
Take care.
As far as I know, private mortgage insurers have the right to file deficiency judgments. And they do where it is legal and the situation allows them. Thus, there are chances that the mortgage insurer will come after you for the money.
Take care.
It was me above, I just forgot to log in!
Oh, Sara - that's the second time I've seen that in the last few minutes! Welcome to the club of those of us who occasionally forget!
For the deficiency to be applicable you must live in a state that allows for the deficiency judgements. Some states only foreclose on the property and take the collateral back, and if there is a purchase money second and there is not enough equity to pay off the 2nd, they will get charged off. You should check your loan docs to see if you use a deed of trust or a mortgage and also check with your state DRE if you are in a recourse state allowing deficiencies. Some states such as Florida allow for a 20 year collection on judgements, attaching to anything you own...
I live in California and from what I have learned, California is a non-recourse state.
sorry, this is Calvin again that posted the original question.
California is a non recourse, non deficiency state for the mortgage loan. I actually have never been asked about the insurance and if they can file any claim at all. They are insuring the mortgage, not yourself per se. Let me ask my manager with 28 years in the business if the MI company has any power of claims...