Junior lender still active after foreclosure. (foreclosed, mortgage, mortgage, sales)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
My house was foreclosed 6/7/2016 and resold 10/2016. The junior lender of the 80/20 mortgage sold my loan in 10/2016 (after foreclosure). This new lender is reporting my account active/open and in late payments to the credit bureaus. They refuse to close it claiming the mortgage is still open. 1) Do they even have rights to the mortgage since technically the mortgage desolved with the previous lender at foreclosure before their acquisition? 2) How do I get them to accept it has been sold? I’ve sent them all the documents but the refuse to accept the foreclosure status.
My house was foreclosed 6/7/2016 and resold 10/2016. The junior lender of the 80/20 mortgage sold my loan in 10/2016 (after foreclosure). This new lender is reporting my account active/open and in late payments to the credit bureaus. They refuse to close it claiming the mortgage is still open. 1) Do they even have rights to the mortgage since technically the mortgage desolved with the previous lender at foreclosure before their acquisition? 2) How do I get them to accept it has been sold? I’ve sent them all the documents but the refuse to accept the foreclosure status.
The junior lender lost the ability to foreclose on the security, the mortgage isn't "dissolved", the debt is simply unsecured now. They can still ask for payment. As can the holder of the first mortgage if they didn't satisfy the loan amount with the sale proceeds.
The debt in the form of a mortgage should be desolved. The debt is now an unsecured debt. The debt as a mortgage was transferred to another lender 4 months after foreclosure. The debt is still listed as a mortgage attached to that address, active and with late payments with the new lender.
The debt in the form of a mortgage should be desolved. The debt is now an unsecured debt. The debt as a mortgage was transferred to another lender 4 months after foreclosure. The debt is still listed as a mortgage attached to that address, active and with late payments with the new lender.
As you're discovering, you still owe the money even after the house is gone & the amounts will continue to grow until you either pay them or declare bankruptcy. They can continue to smear your credit for years.
If you want a "fresh start", you'll probably have to declare bankruptcy, which will involve making a list of all of your assets & property & submitting that list to a federal judge under oath. You won't get to keep any expensive toys & you may have to make payments for years.
You don't get to walk away from debts with spotless credit - actions have consequences.
I’m fully prepared to handle the debt as an unsecured debt not as a mortgage. As you are aware, I’m sure, the clock starts running after the date of foreclosure before I can repurchase another home. FHA loans state 3 years, which for me will be next year. This junior lien should update the mortgage closure to the 6/2016 date as the primary did. They then can reclassify the debt as an unsecured debt and I can pay it off. I won’t do it and restart the clock on my purchase ability. I owe the money and not trying to walk away from the responsibility I just need to the lender to be accurate about what active obligations I have to them. Do I have an active mortgage with them? Absolutely not. The House was resold years ago. My credit report states such. Do I owe them the amount on the promissory note? Yes. As an unsecured debt NOT as a mortgage.
Are they just showing the shortfall? or the pre-forclosure balance? if it sold for more than owed, you get the excess in many States. Are you in a recourse State? Many in Vegas did shortsales, and the HELOC loans and seconds came after them with a vengeance...and if they dont, they are just giving you a few years to get back on your feet, and nail you.
I wouldn't count on that FHA loan next year. Your best bet is to contact the lender and settle the debt if you can. They will usually settle for pretty cheap - pennies on the dollar. Best to deal with this now rather than keep hoping they reclassify the debt as something more friendly to your situation and waste more time in the process.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
