Second mortgage of foreclosure house (loan, personal property, California, non-recourse)

[forestpark]

My house in GA was foreclosed last year. I had two mortgage with the same bank. After my house was foreclosed I did not receive anything from the bank for a whole year. Now the second mortgage start to send bill to me. Can the second mortage go after me?

[Leavethetable]

Short answer is...it depends. First you need to check the laws of your state regarding this topic. Second, is your loan considered recourse or non-recourse? Here is an example.

In CA, there are "anti-deficiency statutes" that protect homeowners from mortgage debt when the loan proceeds were used to purchase the property (purchase money mortgage). In CA, a purchase money mortgage is non-recourse and the bakn cannot go after you for any deficiency (e.g. the second is out of luck).

However, let's say you obtained the second after you purchased the home. That would likely be considered a recourse loan and the bank could come after you for the deficiency or amount you owe them. Also, if you took a second to purchase the loan and then later re-fied that second and took cash out, it could make the loan recourse; again you are liable for the deficiency.

Just some food for thought.

[Modification Specialist]

Originally Posted by forestpark

My house in GA was foreclosed last year. I had two mortgage with the same bank. After my house was foreclosed I did not receive anything from the bank for a whole year. Now the second mortgage start to send bill to me. Can the second mortgage go after me?

Leave/table - California foreclosure laws are some of the tedious in the county. You are a non practical judgment state.

forestpark

I speak to a lot be people facing foreclosure. The state of GA, is a mess.

The answer to your question is yes on your second, and on your 1st.

The line holders position, the 2nd mortgage is behind the 1st mortgage. All they can do is file a judgment, that will go on your credit report. If you try and buy a future property, you will need to satisfy that amount.

You best option right now - is to negotiate a lower settlement, before the courts award a judgment. Once there is a judgment, you can not ask for a lower settlement.

As for your 1st mortgage - letting a property go to a foreclosure, it can be listed your credit report for up to ten years. When the property does sell at an amount less then what you owed on the property. The lender can file a deficiency judgment.

Worst case - once there is a judgment, a sheriff can confiscate person personal property to satisfy the judgment.

If you get hit will a substantial deficiency judgment in the future- your two choices are paying it or filing bankruptcy.

The longer you wait to clear you your mess, the more it is going to cost you............

Let me ask you a question - what are your plans in 10 years, in five years, next year? Do you have any goals? What are you doing for yourself today, that will benefit yourself tomorrow?

Trying to take short-cuts today, will result in a longer route tomorrow......

The secret to success is scheduling yourself.

..