Posted on: 01st Feb, 2010 04:15 pm
I have a primary and secondary mortage with the same bank. After my divorce, I immediatley attempted to negotiate something with my bank (Bank of America) in order to retain my home and not fault on my financial obligations as I knew I could not afford both payments. As I was current on my payments, no one would speak to me. I withdrew my 401K in order to pay for a while, but this ran out and I began to have difficulty. I had the house up for sale, and was even looking to do a short sale. With the market tanking, I had no luck. When I finally was able to speak with someone at the bank to initiate a loan mod/work out option, I was informed that my 2nd mortgage was charged off and there was a zero balance...they indicated...not enough equity to foreclose..charge off. That was in 4/09. Since that time, I have been working with the bank on a loan modification on my primary. I had not had any...and i mean ZERO contact from the lender on my secondary until 12/09, when they called asking why i haven't been making payments! They are now sending me letters asking for the balance in full. Am I still responsible for this? What actions can they take? Also, my ex-husband is the primary on the loan but he Quit Claim Deeded the home? HELP?!?!?! Very Confused and frustrated. Single mom trying to keep my kids in their home!
hi,
a charge-off on the second mortgage does not mean that the loan has been cancelled or forgiven. it simply means that the lender will report the debt as their loss for tax and accounting reasons. the debt could still be collected from you. the lender may either send it to their recovery department or they may also send it to a collection agency. so, you remain responsible for the mortgage debt even if your lender has charged it off.
if a collection agency comes after you to collect the debt, you should first check if they really own the debt and if they have the right to collect it from you. if they validate the debt, you will have to pay it off. however, you can negotiate with them and either settle the debt for less than what you owe or set up a repayment plan to pay it off in installments.
a charge-off on the second mortgage does not mean that the loan has been cancelled or forgiven. it simply means that the lender will report the debt as their loss for tax and accounting reasons. the debt could still be collected from you. the lender may either send it to their recovery department or they may also send it to a collection agency. so, you remain responsible for the mortgage debt even if your lender has charged it off.
if a collection agency comes after you to collect the debt, you should first check if they really own the debt and if they have the right to collect it from you. if they validate the debt, you will have to pay it off. however, you can negotiate with them and either settle the debt for less than what you owe or set up a repayment plan to pay it off in installments.