Do I need to pay for second loan even after charge off?

We have our 2nd showing as a "charge off" and we have not heared from them for over one year. However we are getting ready to file chapter 7 so I called the bank that the second is with and they were willing to lower the debt to 19,440 from 52,000. Should I take this offer of re-payment or should I try to get it even lower since they were wanting 10,500 with the short sale if we went that rought.

I foreclosed on a home I purchased in California with an 80/20 loan, same company. I just noticed on my credit report that the lender "charged-off" the 2nd mortgage. Since California is a purchase money loan state, can the lender still sell this dedt to a collection agency? Would I still have to pay?

Thank You,

"amnom.com/finance/what-happens-when-a-second-mortgage-debt-is-written-off/"

Regardless if a debt is charged off or not, the lien holder can still reserve the right to try to collect on it for up to 7 years.

The 1099 has been issued to you probably by how you filed your taxes, reading some of the irs code, if you claimed mortgage interest as part of your tax return and did not disclose the 1099, it sounds like you are responsible. It is best to talk to an accountant in regards to that portion of your question.

Good Luck!

[Link deactivated as per forum rules. Thanks.]

What do you do if you do not receive any 1099's for a foreclosure? Our home was foreclosed on Feb, 2010 and I still have not received any forms? It was Litton Loan (predatory lenders) google searches are full of this mortgage company being fraudulent and mistreating their homeowner. (all true by the way). Anyway, should I call IRS?

Hi Annie!

Welcome to forums!

Your query has been replied to in the given page:
http://www.mortgagefit.com/budgeting-finance/about49658.html

Take a look at it. Hope it helps you.

Sussane

I received modification on first loan, the second loan was charged off from same bank, What happens now? They said I hav't to pay them $5000.00 today or 10,000 by march 9, or they will turn 2nd over for legal action

Hi jollymon,

You should negotiate with the lender for the second loan and check out if they can reduce the amount for you so that it becomes affordable for you to pay off the loan. Once you start negotiating for better plans, I don't think they will send the account for any legal action.

Thanks

mike r. I need your asst. please. I cant seem to get any answers from my lender.

Hi martha!

Welcome to forums!

Please post your query in details so that members/experts participating here can help you with their opinion in regards to your query.

Feel free to ask if you've further queries.

Sussane

if i have a charge off dec 31 2009 and was sent thru the same company but their collection and then sent again to a third party recently to a 3rd party but charged off dec 31st 2009 what is the ramifications of the 2nd mtge i was told it didnt go thru legal so they aint trying to foreclose and cant since it was discharged what do you recommend and will still talk with a real estate attorney they want from 300 to 1300 a month on a 47000 balance also stated they can settle for 19k?

Welcome anita,

Your query has been answered in the given page:
http://www.mortgagefit.com/inprocess/about53075.html

Please take a look at it. I hope it will help you.

This has a serious effect on your credit report and stays on your report up to seven years. So, if it is possible for you to pay it off then negotiate with the lender to make out a deal where you can pay the debt and the lender changes the status of the account to "Paid as Agreed". Try to get in writing if you attempt to do this.

Charge off is only an accounting process utilized by banks in which they classify a loan as non-collectible and does a tax reduction. Although it will lessen the amount you need to pay for your loan, this does not free you of your debt. You will still have to pay for the rest of the amount loaned at a lower interest rate.

Mike Rodeno is correct! As long as you receive a 1099C and not a 1099A, your debt is cancelled and can't be sold to a collection agency. Your lender is "suppose" to also issue a "Certificate of Release" to clear the title but many times this is not done and must be requested by you.

Thanks for your opinion, wcbpro!! :)