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My second mortgage became a charge off - What is that?

If you haven't paid your mortgage for 6 months or you've been through a foreclosure or short sale wherein you couldn't pay off the second loan after getting rid of the first, your lender is likely to issue a second mortgage charge-off.

What is second mortgage charge-off all about?

If your second mtg lender intends to charge off the loan, it means he's declaring the debt as uncollectible. So, the lender will no longer collect payments from you. But this doesn't mean that you don't owe the money. The lender reports the debt as a loss when he files a Profit and Loss Statement (for his company) with the Internal Revenue Service. He sells off or assigns the debt to a collection agency that'll collect the payments on his behalf. So, your debt hasn't been canceled or forgiven.

When a second loan is charged off after a foreclosure/short sale on the property, the mortgage is considered as an unsecured debt since the collateral has been sold off already.

What happens after a second loan charge-off?

When a second loan is charged off and sold to a collection agency (CA), it's essential that you negotiate an alternative payment plan with the CA. In case you can't meet up with the monthly loan payments, you may settle the debt for an amount less than what you owe to the CA. Otherwise, you may face any of the consequences explained below:
  • CA may sue you: If you don't make any payment towards the mortgage, the CA may file a lawsuit against you during the SOL (Statute of Limitation) period. Once you decide to settle the debt, make sure you get a settlement agreement in writing from the CA.
  • Property retains the 2nd lien: The charge-off does not remove the second lien from your property unless you pay it off.
However, when the second mtg debt is settled, you may have to pay tax on the balance forgiven by the lender. This is because the balance forgiven or canceled debt is considered as your income. But you can avoid paying the tax provided you qualify for mortgage debt forgiveness.

Will I get 1099-C Form after a second loan charge-off?

Since a charge-off doesn't imply cancellation of debt, therefore the lender won't send you a 1099-C Form. Such a form is sent only when a lender cancels your debt and reports it to the IRS as a tax loss.

Can I remove second loan charge-off from credit report?

You can have the charge-off removed from your report only when you settle or pay off the account in full. Unless you make payments towards the account, the negative item will reflect on your credit report for 7 years. After you settle or pay the charged-off account in full, request the collection agency to update the account status as "Settled charge-off" or "Paid in full" respectively. However, a "Paid in full" is certainly better than a "Settled charge-off" status on your credit report. Know more on how to remove charge-off from credit report.

When a second mortgage is charged off, it brings down your credit score by 50 points or more depending upon the other negative items you may have on your report. The best way to get rid of this negative item is to pay down the debt asap and negotiate with the CA to update your account status accordingly.

Our 2nd mortgage with beneficial was an original 15,000.00 loan. It has escalated to 32,000.00. They are going to charge off this month. My husband is disabled & 1 child disabled. The loan is only in his name. But my name is on the deed. I understand a 1099 we will receive. What happens to the charge off. with a lien against the home. Will it come off in 7 years? Thanks, Melissa

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Is a second lien from the seller erased from the credit report after 7 years?

Like | Dislike | Share | Posted: Tue, 08/30/2011 - 11:33 | Post subject:

jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Lani,

If the lender has charged off your second mortgage, he can sell it off to a collection agency. If this is what your lender has done, then a collection agency can come after you to recover the debt from you. The lender may not always send the charged-off debt to a collection agency. They may leave the lien on the property as it is and the try and collect it when the home is sold off.

If the debt is sent to a collection agency, you make a settlement with them and pay it off, the lien would be removed from the property. However, you need to negotiate with them properly and in order to make sure they do remove the lien once the debt is paid off, make some sort of written agreement with them. Do not believe in any verbal promise or agreement.

Thanks,

Jerry

Like | Dislike | Share | Posted: Thu, 02/04/2010 - 02:14

steven_swihart's picture
steven_swihart | Joined: June 15, 2009 12:34 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

thanks adonis, really appreciated, I guess I'm not too worried about my credit right now but it would be nice to keep any more negative activity off of it lol

Like | Dislike | Share | Posted: Wed, 06/30/2010 - 04:43

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi JLO,

The [url=http://www.mortgagefit.com/second-mortgage.html]second mortgage[/url] lender can charge off the balance amount and assign it to a collection agency if he is unable to recover the loan.

Welcome Guest,

If the second lien is paid off, then it might get removed from your credit report after the 7 years. However, if you haven't paid it off, then it may remain in your credit report as a negative item.

Thanks

Like | Dislike | Share | Posted: Tue, 08/30/2011 - 22:01

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jessica, my 2nd mortgage is showing up on my credit report as a charge-off. HOw can I find out the name of the collection agency who is now handling my account? I want to clear this up as soon as possible. Also, because the mortgage is now charged off, does thatm ean that there is an automatic lein on my house? I am current with my first mortgage. Any insight to this would be appreciated. Thanks.
"cbuonopane@revere.mec.edu"

[size=9:deed89f6e4][color=Red:deed89f6e4][Email address deactivated as per forum rules.][/color:deed89f6e4][/size:deed89f6e4]

Like | Dislike | Share | Posted: Thu, 02/25/2010 - 08:45

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I'm on a modification with my first lender but my second has been charge-off..
Can include the charge-off in my BK and if so what would happen with the deed?

Like | Dislike | Share | Posted: Fri, 05/21/2010 - 15:32 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Diandmv,

The insurance company can come after you in order to collect the money from you. But I don't think they will be able to collect any taxes from you.

Thanks

Like | Dislike | Share | Posted: Fri, 02/04/2011 - 01:22

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I payed someone to help me with mortgage loan and I felt she had helped me. But found out that the mortgage company charged off half my mortgage. They said that all I have to pay is 39000.00and the house is mine. It should be payed off in 7yrs. is this true

Like | Dislike | Share | Posted: Tue, 02/16/2010 - 18:23 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

can a collection agency who holds a 2nd (charged off by bank) "foreclose" on a home when the 1st mortgage is current?
thank you.

Like | Dislike | Share | Posted: Mon, 03/22/2010 - 08:22 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

habitat for humanity has my first mortgage....beneficial has secound ive lost my job due to downsizeing and can no longer pay beneficial ..still paying habitat past due is to much to catch up to they wont talk about it....beneficial calls and gets threatning what to do

Like | Dislike | Share | Posted: Tue, 11/02/2010 - 07:01 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

It doesn't appear to me that there's a collection agency involved in this situation...is that a proper assessment of what you've told us, MCC?

Why your lender is so adamant about receiving only the regular monthly payment and nothing more or less is rather odd. You'd think that they'd be happy as can be to receive any amount. It's like found money for them, because they no longer consider the loan you have as an asset for accounting purposes. They can now take every nickel you pay them into pure income, which looks nice on their financial records.

I'd say that they're pretty foolish to look a gift horse in the mouth.

Like | Dislike | Share | Posted: Fri, 07/22/2011 - 07:12

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My house has one mtg on it which i got way behind on and applied for a modification but after waiting 6 months it was denied..insted of forclosing on the home because of the drop in value the bank decided to charge off the interest and told me i can make pmt of what i can afford towards the principal and when te market comes back up i will have to A([url=http://www.mortgagefit.com/refinance.html]refinance[/url] w/them or B) finance thru another company for the balannce. What happens w/the charge off? will they take me to court and garnishe my wages? I live in Florida and the bank said it can take prob 10 yrs b4 the value of the homes gpo up here. should i do this

Like | Dislike | Share | Posted: Wed, 01/27/2010 - 11:09 | Post subject:

jenkin7's picture
jenkin7 | Joined: June 4, 2007 11:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Kim,

[quote:9023108733] hey want to lower the interest rate from 6% on 1st w/ 7 yr. ARM to 47/8% on 30 year. Also as part of terms would be a debt forgiveness on 1st and write off of our 2nd.[/quote:9023108733]

If the lender forgives certain portion of the first or the second mortgage, it will be considered as your taxable income. But you can claim exemption from paying taxes on this forgiven debt amount, if you have used the property as your primary residence. You are not going to do a foreclosure or short sale or deed in lieu. So, your credit scores will not be hugely impacted. However, you should discuss with your lender about how they are going to report this to the credit bureaus. If the both the first and the second mortgages are with the same lender and he has agreed to write off the second, you will not be required to repay it. However, whatever the lender is promising, he must give it to you in writing.

Like | Dislike | Share | Posted: Fri, 03/19/2010 - 00:21

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi baileydal!

Welcome to forums!

Wasn't your second mortgage discharged in your bankruptcy filing? You should check out your bankruptcy discharge documents and even contact your bankruptcy attorney to get the information. If the loan has been discharged in your filing, then you're not responsible for it anymore.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Fri, 05/28/2010 - 00:11

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

We just got our modification approved on our 1st mortgage and started to work on my 2nd(HELOC) with Chase. I has been charged off and taken to a 3rd party. It was not sold but has gone to a servicing agent. My balance is 143,000.00. Our 1st mortgage is 350,000.00 and we that is basically what my house is worth now. I would really like to settle this and be done with it. I of course want a low settlement cause the value in my house is no longer there. Am I going to have to settle for a higher price than if it was actually sold for pennies on the dollar? Is it also easier to settle at the end of the year cause everyone wants to close their accounts out as well? I am not sure how to handle this now because I was expecting it to be sold. Any help would be great!

Like | Dislike | Share | Posted: Mon, 12/06/2010 - 14:43 | Post subject:

seattle888's picture
seattle888 | Joined: June 28, 2013 01:39 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

If 2nd mortgage become an unsecured debt when it sold off to another lender or debt collector. Can they still do foreclose on your house in WA state as an unsecured debt position on 2nd mortgage or they can only try to collect the debt from you traditional way?

Like | Dislike | Share | Posted: Fri, 06/28/2013 - 01:48 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Paul,

If the property has been foreclosed by the lender and sold off, then you won’t remain the owner of the property. As far as negative items are concerned, they will remain mentioned on your credit report for 7 years.

Like | Dislike | Share | Posted: Fri, 10/26/2012 - 23:51

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

The bank and i were in discussion on modifing our loan,(2nd)that is,I do have a first with a different lender,and they modified there loan with us,The bank carring our second charged off the loan with out notification at all,know my credit is ruined,do have any legal corse againts the Bank ,i was put on permanet disability,I obvious can't pay what i was,i was making payments,but not full payment,what can i do -or what should i do,no money for an attourney,the back wants me to pay off the loan under the charge off,should they reduce the amount i'm comfussed because they never tried to talk to me.

Like | Dislike | Share | Posted: Mon, 04/26/2010 - 21:35 | Post subject:

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Tom!

Welcome to forums!

You can apply for a refinance as you have equity in your property. It will be the lender's discretion whether or not he will consider your request as your [url=http://www.mortgagefit.com/second-mortgage.html]second mortgage[/url] is a charge off.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Mon, 08/01/2011 - 23:07

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I had a foreclosure 5 years back.The HELOC was charged off and still available in credit file.I purchased a new home through FHA loan 18 months back.My credit score is around 720.I am paying off my credit cards regularly in the last 5 years and the remaining balance is approx. 8K.
Will I be able to borrow money from this new home if enough equity is available?I live in the state of VA.Please advise

Like | Dislike | Share | Posted: Tue, 10/22/2013 - 19:40 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I purchased my home in 1/2006. I got a HELOC on in it just in case, as I am self employed- and thank goodness I did as I needed it. In 2006 business fell completely and I ended up using a lot of that money to run my business. But since the market lasted longer than expected I ended up filing bankruptcy in September 2009. When I filed bankruptcy I included my 1st and 2nd mortgage. I then modified my 1st, at that time I wasn't sure what to do with my 2nd. This year my GMAC (my 2nd) sold off to Ocwen. I have not heard anything from GMAC since filing bk except this year which was a letter stating they transferred or sold to Ocwen. I received one letter from Ocwen stating they now have my loan. So my question is
its been over 5 years since I made a payment (10/9/2008 to be exact). So does this fall under the statue of limitations? And if so, how do I handle something like this? Also my 1st TD is still over what my house is worth.

Like | Dislike | Share | Posted: Mon, 11/18/2013 - 14:41 | Post subject:

jenkin7's picture
jenkin7 | Joined: June 4, 2007 11:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Tiffany,

Are you sure the lender has charged off the debt and sold it to a collection agency? First, you should contact your second mortgage lender and see if they have really sent the mortgage debt for collections. You should also ask the collection agency to validate the claim that they now have legal rights to collect the debt.

The collection agency may try and get a judgment against you to garnish your wages. But they are unlikely to foreclose your property to satisfy the lien. If it were possible to recover the second mortgage lien through foreclosure of the property, the lender would not have charged it off.

The mortgage has been sent to collections. It has not been discharged and you still owe it. So, you do not have to report it as a write off. But if the lender forgives this debt, you will have to report this on your taxes as your income.

Like | Dislike | Share | Posted: Tue, 03/23/2010 - 23:43

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi, please try to follow me here and I'll try to make sense. Back in '07, I bought a condo for $180k. 1st was $144k & 2nd was $36k (80/20). Value of it plummeted, stuff happened and stopped making mortgage payment Jan '09. I made no 1st or 2nd payments for the entire '09. Property went into foreclosure status at the end of '09. 2nd lender "Relived the Debt" between the foreclosure occured. Before foreclosure was complete, 1st lender asked about a "remodification". Penalties & interest got rolled into new loan and wouldnt be reported to credit agency. 2nd was gone & I could afford just the one payment so I went that route & havent missed a payment since. 2nd mortgage did go on my credit report as a Foreclosure. I got a statement from the 2nd lender in '10 that said "loan was charged off of our system at the discretion of the investor on the account". I had to call & ask for this statement but besides that, they have never reached out to me since the end of '09. This "foreclosure" is the only negative on my credit report. Since I thought it was part of the "Relief of Debt Act", I dont think it should be on my credit report. Plus, I still own the property. Is it possible to have this fixed on my credit report? If so, what would I need to do? My accountant said I didnt need to claim as income b/c it was relieved. What are your thoughts? I believe this to be a unique case so I have no clue what I can do here and I want to clean up my credit report. Let me know if you need clarification. Thank you, Paul

Like | Dislike | Share | Posted: Fri, 10/26/2012 - 09:38 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

So my 2nd loan got charge off and i end up paying the collection agency for 25,000 and now it is pay in full...just got 1099 for the remaining of the loan..do i qualifield for the debt forgiveness act.. on that its my primary home..

Like | Dislike | Share | Posted: Tue, 02/15/2011 - 14:45 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Our property is in Calfornia. The 2nd mortgage lender told us because we haven't paid the loan in 6 months, that the paperwork is going to the PMI insurance carrier for a claim and that the loan will show as a charge off on our credit. We were also told by our lender that we cannot have a lien placed on the title for the amoutn because of California Law. Is this true?

Like | Dislike | Share | Posted: Tue, 04/13/2010 - 21:15 | Post subject:

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guest!

Welcome to forums!

You will get a settlement offer based on your financial hardship. Unless the creditor checks your paystubs, W2s, bank statements etc., he won't offer you a good settlement offer.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Tue, 03/22/2011 - 00:20

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I don't believe that a purchase price that shows up as Zero will have any impact. That they failed to file the lien can have a far greater impact, and Adonis' suggestion that you contact an attorney to assist you is likely your first best bet in this situation. How is it that you found out that the lien was not placed?

Like | Dislike | Share | Posted: Mon, 07/18/2011 - 11:42

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thanks for sharing the info! :-)

Like | Dislike | Share | Posted: Tue, 03/15/2011 - 23:21

savior70's picture
savior70 | Joined: March 25, 2009 05:14 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

To enterprise,

It sounds strange that you took out a second loan, but it is not registered against your house with the land registry! Lenders would not do such mistake because when they give you a loan, they do want you to pay in back in full. In you case, I’m not sure why it is not properly registered. I think you should consult an attorney and get the paperwork reviewed by him. He can tell you if the second loan agreement is legally void. By the way, have you contacted the second lender since the house was sold? Do they want to collect the second mortgage balance or have they forgiven the debt amount?

To anonymous,

A Home Equity Line of Credit is secured by the value of the property. The lender has the right to foreclose on your home if you default on the loan. If the borrower is deceased, the lender will sell off the property to recover the outstanding loan balance, even though the property has been transferred to another person. If that person wants to keep the property, he will have to continue making the payments towards the loan or will have to pay it off in full to satisfy the lien.

Like | Dislike | Share | Posted: Fri, 03/19/2010 - 02:27

jenkin7's picture
jenkin7 | Joined: June 4, 2007 11:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi desperate,

It is entirely up to your lender or the collection agency if they will try and get a judgment against you to garnish your wages or put lien on your other properties. If they are going to sue you, it will cost them certain amount of money and also some time. They won't sue you unless they think they can collect the outstanding debt from you. If you cannot continue to make payments on your debts, you can consider the option of [url=http://www.mortgagefit.com/know-how/filebankruptcy.html]filing bankruptcy[/url]. If you intend to reorganize your debts, you can file Chapter 13, else you can go for bankruptcy Chapter 7 and have your debts discharged.

Like | Dislike | Share | Posted: Tue, 12/29/2009 - 22:46

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I sold my home 5 years ago and carried a $20,000 second. Present owners lost job and the bbank received a short sale offer and they offered us $2,000 to release our 2nd. Can I claim the loss on my taxes? If not what happens to the cost basis of the old home since I rolled the gain into my new home?

Like | Dislike | Share | Posted: Wed, 06/01/2011 - 12:22 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guest,

If the loan was included in your bankruptcy filing and if you have got it discharged, then you won’t be liable for making any kind of payments. But as the loan was not included in your bankruptcy, then you’re still liable for the payments. Convince them to give everything in writing so that you can start making the payments.

Like | Dislike | Share | Posted: Sun, 02/24/2013 - 21:26

jenkin7's picture
jenkin7 | Joined: June 4, 2007 11:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

To muno,
[quote:224fad4064]If I make a partial settlement will it affect the amount that I settle for?[/quote:224fad4064]
I'm not sure what you intend to mean by what is quoted above. But, yes, you can obviously negotiate with the second lender or the collection agency (if the debt is sold to them) and settle the debt for an amount less than what you actually owe. Once they accept your settlement offer and you make payments to them to settle the debt, they will not come after you with a judgment.

Like | Dislike | Share | Posted: Tue, 04/06/2010 - 00:02

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi thank you for your response. i am the one here in California that is desperate on this collection agency telling me that i have to make the payments of the 97k. my first mortgage has been modified and its a good payment. I had gotten someone to help out for the modification which they did. i now have this problem with the agency and i do understand what your responses are but the person that helped me said that the bank will send a 1099 but maybe not this year but it will probably go for 2010 just so they can try and collect. she said for me to fill a second form which is a 982(1099misc income) once the lender sends me the 1099 it means that it the bank has written off as a business loss with the IRS. they unare unable to attempt to collect on the amount owed on the second mortgage because its take as a buisness loss(it gives them a credit on filing) and it would no longer even be an active account with them they have been telling me tha t i should not pay the collection agency. i am really confused. could someone help me that has gone through this? the collection agenvy says that if i dont make payments i will get wage garnishment, or the IRS will hold my tax returns and do a lien against the house... please help

Like | Dislike | Share | Posted: Mon, 12/28/2009 - 10:05 | Post subject:

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi GM!

Welcome to forums!

The bank can sell off the loan to a collection agency. However, if the loan has been discharged, then you won't be personally liable for paying it. You may ask the lender to call back the account from collections and then you can negotiate for a loan modification on it as well.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Thu, 04/28/2011 - 22:54

flowzip's picture
flowzip | Joined: October 3, 2010 07:34 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

I am four months into my trial mod period with Chase. I have a second (equity line) with US Bank. When should I talk to US Bank about coming to some sort of settlement on my 2nd. As of right now I have not missed a payment on my 2nd. In fact I still have available credit of 60K. It has never been adjusted even though the value of my home has dropped in half. My question is should I wait to clue in US Bank until after my 1st is modified or should I talk to them now?

Like | Dislike | Share | Posted: Sun, 10/03/2010 - 19:57 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Micky,

If you've signed an agreement with the collection agency regarding paying off the loan, then you would liable for the terms and conditions of that agreement. The collection agency may take actions against you as per the agreement.

Thanks

Like | Dislike | Share | Posted: Fri, 04/23/2010 - 22:25

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My mortgage company recently did a charge off on the first mortgage and not the [url=http://www.mortgagefit.com/second-mortgage.html]second mortgage[/url]? Why was this done? What recourse do I have?

Like | Dislike | Share | Posted: Fri, 03/26/2010 - 10:49 | Post subject:

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi caaaam!

Welcome to forums!

As the second mortgage has been charged off by the lender, he won't come after you in order to recover the dues. However, the collection agency to whom your account has been sold off can come after you for the dues.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Fri, 12/31/2010 - 20:49

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

If my 2nd mortgage is charged off, can they still foreclose on me at some point in time? or if they sell it to a collection agency, can the collection agency foreclose on me?

Like | Dislike | Share | Posted: Thu, 01/13/2011 - 08:46 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guest,

The collection agency or the mortgage lender cannot sue you for a discharged debt.

Thanks

Like | Dislike | Share | Posted: Tue, 02/08/2011 - 20:59

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi MIKE,

As far as I know, everytime the new loan gets sold off to someone else, the new creditor will have the rights to report it. Once the SOL gets past, then he may not report it. If the property has been really sold off, then you can get in touch with the county recorder's office and get to know the information about home sale.

Like | Dislike | Share | Posted: Thu, 01/17/2013 - 21:24 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

A charge off is an accounting tool to eliminate a non-performing asset from consideration as an asset. That doesn't mean the lien on the property is unenforceable, though.

By my reckoning, you have liens totaling $198K on a condo you value at $175K. I don't think a new lender is likely to overlook the second lien; BofA, given your payment history on the first mortgage, might just take a look at you a bit more favorably than in the past. Of course, they'd like to get back a goodly sum on that second mortgage in the process, I imagine.

Like | Dislike | Share | Posted: Tue, 08/02/2011 - 10:08

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smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi L Osborne!

Welcome to forums!

You won't have to pay taxes. Rather, the collection agency will come after you to recover the debts. You can set up a payment plan with them and get rid of the debts.

Feel free to ask if you've further queries.

Sussane

Like | Dislike | Share | Posted: Wed, 02/01/2012 - 22:52

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Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

If you have modified your loan, then it will be mentioned in your credit report. It will remain in your credit report for the next 7 years. I don't you will be able to remove it from your credit report.

Like | Dislike | Share | Posted: Thu, 07/28/2011 - 00:07

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Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I have not got a form from BOA 1099- on a short sale-records say Charge Off. Will I need to pay taxes,and also should I let the IRS know about this???I sold the the home in Nov.2011 short sale,my papers say Charge Off

Like | Dislike | Share | Posted: Wed, 02/01/2012 - 18:07 | Post subject:

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Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

i had filed for bankruptcy before already i would not like to do that again. i will just wait and see what happens...which i hope for the best. The only way to get rid of all this is to WIN the LOTTERY! i hope that comes true one of these days...I thank you everyone who replied back to me. if anyone else knows something else new please send your comments.

Like | Dislike | Share | Posted: Mon, 01/04/2010 - 10:12 | Post subject:

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Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

AZ has a "no-deficiency" statute in their state laws. We had a second mortgage on a foreclosure and it was "charged-off." No suit was ever filed by second lienholder and it is a charge off on my credit. It is 21 months old. Is there any recourse for 2nd Lienholder? State statutes say they must file a suit within ninety days after foreclosure? Thanks

Like | Dislike | Share | Posted: Fri, 12/31/2010 - 09:26 | Post subject:

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Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

during negotiation for a loan mod on my home, which has a 1st and 2nd, the second became "charge off"- the loan mod is comming to a end and depend on what the investor decide to do I may have to short sale my property. what is going to happen to the 2nd.
Another question: if I would file BK, would the second be included in it, and can I still save my house?

Like | Dislike | Share | Posted: Sat, 11/14/2009 - 08:05 | Post subject:

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miamikk | Joined: June 16, 2010 01:37 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

I just received a call from collection agency (Zakheim) after my 2nd mortgage was charged off by Citi last month after my application for loan modification was declined.

I owe them about $77K (20% loan) and the collection agency wanted me to pay $1065 for 72 months. My original payment with Citi was about $640/month and I couldn't afford that after losing job and its almost impossible to pay $1065/m. The person from CA said the file will go to court. She used bunch of legal terms and processes like they get my other assets etc. but most of the info was flying over my head.

My primary mortgage (80%) just approved me a loan modification with affordable terms. I just mailed the signed package to them 2 weeks back and I am yet to receive a copy of package with banks signature. All this happened after they served me with foreclosure notice in Dec 2009 and I got an attorney to defend my case. Of course they added about $10-$20K extra to the original loan amount.

This puts me in a really big fix. What will happen next ?

If the CA sues me, whats the best/good/bad scenarios I will be looking at ?

Will CA suing effect the primary mortgage modification ?

What should I do at this time ? Can I negotiate the loan with CA with say like $40-$50k over 6-year period ?

This is in Miami. I cannot sell my property as its worth about half of the amount I owe to lenders. Any advise is really appreciated.

Like | Dislike | Share | Posted: Wed, 06/16/2010 - 13:54 | Post subject:

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