By Admin on Jul 31, 2008 in Renting & Real Estate
howi_how asked:
We filed bankruptcy a year ago. We left out the first mortgage but included the second mortgage (home equity line of credit). It has been discharged, no one contested it and we haven’t received a statement or any other communication from them since. We want to sell the house now to our daughter. Does that 2nd mortgage company still have a claim to the property?
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We filed bankruptcy a year ago. We left out the first mortgage but included the second mortgage (home equity line of credit). It has been discharged, no one contested it and we haven’t received a statement or any other communication from them since. We want to sell the house now to our daughter. Does that 2nd mortgage company still have a claim to the property?
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Yes, they still have a claim.
Aardvark | Jul 31, 2008 | Reply
Consult your bankruptcy attorney. It is not normally possible to discharge a mortgage unless it is paid off.
PIE R SQUARED | Aug 2, 2008 | Reply
Ask a realtor to check and see what the liens are on the property so you know what your still have.
Rico | Aug 5, 2008 | Reply
I assume that the home equity line of credit was secured by a Mortgage or a Deed of Trust. If that is the case, you have been discharged of this debt personally, but the second mortgage is still attached to the property and this loan will need to be paid off in full before the property can be sold to someone else with a clean title. The mortgage company typically will not contact you after a Bankruptcy, since they cannot require you to personally pay the loan. They do still retain the right to foreclose on the property, but in some cases they are not interested in spending the money to do that. The total payment due on the loan will include late fees and interest accrued since the last payment due on the loan. I would suggest first having a title report run to see if the loan still shows up on title (probably will). If it does, you may want to contact the bank to see how much they say is owed. You may be able to negotiate on the back interest and late fees.
laughingdog57 | Aug 8, 2008 | Reply
Consulting an attorney will be your best course of action in this situation. That said, generally, it’s very difficult to discharge mortgage debt, particularly if you attempt to keep the home.
Ideally your attorney will be able to advise you regarding the best course of action to take, should your property still show a lien for the 2nd mortgage.
Most states offer some sort of protection for those in your situation. I’d reccomend reading up on your state’s laws regarding homestead exemptions, and mortgage recourse.
Keep in mind that the 2nd mortgage lender could potentially foreclose using a variety of methods, including purchasing your primary mortgage note. This can, and DOES happen.
Call around and find a real estate attorney, you may even be able to lookup the liens against your property using your county’s web site, or local record archive. Good luck, and I hope you’re able to get out of debt for good!
YthHomeOwner | Aug 11, 2008 | Reply