Posted on: 28th Jun, 2011 08:22 am
I live in California, and have made at least 6 payments since i've had the 2nd mortgage, but now i can't afford to make payments. The 2nd has been transferred to a collection agency, and of course they are calling and sending letters to get payment. The 2nd was used to invest/fix up my house, and the original loan amount was $100,000 it is now $86,000. What more can the collection agency do, and is there a statue of limitations is California?
California is a deed of trust state. Check your loan docs on the second, since it was not purchase money. Make sure a deed of trust was used, and look for the power of sale clause. The power of sale gives a trustee and lender to start foreclosure in event of default. 90 Days of delinquent payments, then the notice of default is filed. NOD is up for 90 days, then the lender/trustee can set up a Trustee Sale and publish the auction for 21 days. You would have 5 days before the sale to cure the account. In deed of trust states, the only thing the lender can do is take back the collateral on a mortgage. Since you took money out on top of the purchase, check on the loan docs to make sure you are on a DOT. California does not allow for deficiency judgements when using the DOT. The 2nd can purchase the 1st mortgage and initiate foreclosure at any time.