Posted on: 15th Jul, 2007 08:29 am
my house is in foreclosure soon to have sheriff sale date assessed.I have a 1st and 2nd mortgage. i am trying to do a loan modification with my 1st mortgage company but recently found out my 2nd mortgage company did a charge off on my account. Due to my husband losing both his legs and my son having emergency surgery this past year has put us in this situation, so funds are limited. There is no equity in my home as my home is worth less at the time that i owe on it. We want to stay in our home as it is set up to accommadate my husbands disability. How will the charge off effect me? and does anyone have any suggestions as to what i can do? I have contacted all non profit agencies, HUD and mortgage companies but no one seems to be able to help.....Brenda
hi jbmonz,
welcome to the forums.
i can feel the pain that you're going through right at the moment. but please have patience and try to fight against this critical situation.
your second mortgage has been charged off. this means that the lender offering the second loan has forgiven the debt. this implies that you need not pay the second lender the balance on the second loan. but in such a case, you may have to pay income tax on the amount of the debt forgiven. this is because your second lender will report the forgiven debt as a financial loss to the internal revenue service. and, he should also provide you with a 1099-c form. but has he done that yet?
considering your current financial situation, i shall suggest that you accept the charge-off though it will have a negative effect on your credit report. but right at the moment, you don't have any other option.
however, you still have a chance to reduce the negative impact that it can have on your report. what you can do is, just pay off the second mortgage when you have the funds and then update your credit report which will probably state "paid charge-off".
regarding the loan modification, what's the status there? is the company willing to do so?
feel free to come up with further queries. :)
welcome to the forums.
i can feel the pain that you're going through right at the moment. but please have patience and try to fight against this critical situation.
your second mortgage has been charged off. this means that the lender offering the second loan has forgiven the debt. this implies that you need not pay the second lender the balance on the second loan. but in such a case, you may have to pay income tax on the amount of the debt forgiven. this is because your second lender will report the forgiven debt as a financial loss to the internal revenue service. and, he should also provide you with a 1099-c form. but has he done that yet?
considering your current financial situation, i shall suggest that you accept the charge-off though it will have a negative effect on your credit report. but right at the moment, you don't have any other option.
however, you still have a chance to reduce the negative impact that it can have on your report. what you can do is, just pay off the second mortgage when you have the funds and then update your credit report which will probably state "paid charge-off".
regarding the loan modification, what's the status there? is the company willing to do so?
feel free to come up with further queries. :)
Hi Brenda,
It's really sad to hear of all these happening to you. May God give you the strength to fight out this situation.
So, far I think you're on the right track. You should try for a loan modification of the first loan and then pay it off. regarding the second loan, since there is a charge-off, so you need not worry about it now. But after paying down the first mortgage debt, try together sufficient finds and then start paying for the second loan also. It's not mandatory to pay off the second loan since there's a second mortgage charge-off. Still it's better to pay it so that it will help improve your credit score.
Thanks.
It's really sad to hear of all these happening to you. May God give you the strength to fight out this situation.
So, far I think you're on the right track. You should try for a loan modification of the first loan and then pay it off. regarding the second loan, since there is a charge-off, so you need not worry about it now. But after paying down the first mortgage debt, try together sufficient finds and then start paying for the second loan also. It's not mandatory to pay off the second loan since there's a second mortgage charge-off. Still it's better to pay it so that it will help improve your credit score.
Thanks.
Brenda, how long its been that the second note holder charged off the account? After a certain number of years it will automatically come off your credit report.
"How charge off will affect you" - You may have to pay tax based on how much amount was charged off.
"How charge off will affect you" - You may have to pay tax based on how much amount was charged off.
" i am trying to do a loan modification with my 1st mortgage company but recently found out my 2nd mortgage company did a charge off on my account."
1st mortgage company has agreed to loan modification?
If the second loan company has charged off it means they feel the debt cannot be recovered anymore and have stopped accounting for it. They charged it off as the sheriff sale was being considered and all the proceeds were to go to 1st mortgage holder.
Miller
1st mortgage company has agreed to loan modification?
If the second loan company has charged off it means they feel the debt cannot be recovered anymore and have stopped accounting for it. They charged it off as the sheriff sale was being considered and all the proceeds were to go to 1st mortgage holder.
Miller
My 2nd mortgage was charge-off back in 2004, what will happen if I don,t pay the 2nd mortgage. Paying 1st mortgage on time.