Posted on: 13th Apr, 2010 03:12 pm
Property in CA - Primary Residence
We are in the middle of a loan modification, have stopped paying both our 1st and 2nd (both with Chase), and our property falls into the non recourse category. My question is:
If they charge off the 2nd while we are negotiating a loan modification, and we then end up foreclosing (thus, not accepting or being approved for a permanent modification), will the 2nd continue to follow us on our credit, or will the CA non-recourse law 580(b) or the one-action rule protect us from that debt following us forever? It should be noted that our 2nd was 100% purchase money and never refinanced.
Thanks!
We are in the middle of a loan modification, have stopped paying both our 1st and 2nd (both with Chase), and our property falls into the non recourse category. My question is:
If they charge off the 2nd while we are negotiating a loan modification, and we then end up foreclosing (thus, not accepting or being approved for a permanent modification), will the 2nd continue to follow us on our credit, or will the CA non-recourse law 580(b) or the one-action rule protect us from that debt following us forever? It should be noted that our 2nd was 100% purchase money and never refinanced.
Thanks!
Hi memarch,
As the second loan has been charged off, it will be mentioned in your credit report. The lender will not sue you for the second loan but the collection agency will contact you for the payments. As far as I can understand, the collection will be able to come after you though CA is a non-recourse state. If the lender forecloses the property to recover the first mortgage, then he won't be able to come after you for the deficient balance.
Take care.
As the second loan has been charged off, it will be mentioned in your credit report. The lender will not sue you for the second loan but the collection agency will contact you for the payments. As far as I can understand, the collection will be able to come after you though CA is a non-recourse state. If the lender forecloses the property to recover the first mortgage, then he won't be able to come after you for the deficient balance.
Take care.
Are you aware of how long that would stay on our credit report if we never settle with the collection agency? Could it follow up for decades or is there a statute of limitations (I.e.: 7 years of so)?
Hi Guest,
As far as I know, the statute of limitations is of 4 years in California. However, for further advice, have a word with your attorney.
As far as I know, the statute of limitations is of 4 years in California. However, for further advice, have a word with your attorney.
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