Are we obligated to pay the second loan on a foreclosure home? 10 Answers as of May 21, 2013

About six years ago, our home went into foreclosure and we had a second loan on it. The first mortgage was paid off, but second was not. Are we obligated to pay the second note, if we no longer have the home?

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Stephens Gourley & Bywater | David A. Stephens
Probably yes, although the statute of limitations may have run.
Answer Applies to: Nevada
Replied: 10/24/2012
Law Office of D.L. Drain, P.A.
Law Office of D.L. Drain, P.A. | Diane L. Drain
The answer is "maybe". It depends on the state where the property is located, the type of loan and the type of real property. Talk to a competent real estate attorney in the state where the property is located.
Answer Applies to: Arizona
Replied: 10/24/2012
Victor Varga | Victor Varga
Yes.
Answer Applies to: Maryland
Replied: 5/21/2013
STASCH LAW LLC
STASCH LAW LLC | Sarah Stasch
The foreclosure satisfies the first mortgage. The second mortgage becomes an unsecured debt, and the bank can pursue for payment. Often, if they do, you can negotiate a reduction.
Answer Applies to: Washington
Replied: 10/24/2012
Danville Law Group | Scott Jordan
The answer to your question depends on a few additional facts. Was the second mortgage owned by the same bank? Was the second mortgage a purchase money loan? If the 2nd was actually a HELOC and not used to purchase the home, yes, you can be sued for the balance. However, you say it has been 6 years since the foreclosure. Have you been paying all this time? If not, the Statute of Limitations might have run for the bank to collect on the debt. You should contact a local consumer law/bankruptcy attorney to discuss your options.
Answer Applies to: California
Replied: 10/24/2012
    R. Jason de Groot, P.A
    R. Jason de Groot, P.A | R. Jason de Groot
    You are obligated on the loan unless and until you file a bankruptcy and the debt is discharged.
    Answer Applies to: Florida
    Replied: 10/24/2012
    Frank Law Group, P.C.
    Frank Law Group, P.C. | David E. Frank
    Not if the money from the second was used to purchase the home. Otherwise, yes, you are liable for it.
    Answer Applies to: California
    Replied: 10/24/2012
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    The second mortgage can go after you for a deficiency judgment if they want.
    Answer Applies to: New York
    Replied: 10/24/2012
    Law Office of Bijal Jani | Bijal Jani
    Unfortunately, yes, if you did not have a agreed upon writing which would stop the 2nd mortgage holder from exercising its rights to collect under the mortgage.
    Answer Applies to: New York
    Replied: 10/24/2012
    Gallagher & Associates Law Firm, P.A.
    Gallagher & Associates Law Firm, P.A. | Charles R. Gallagher III
    Your leaving the home does not alter the lenders rights to collect from you on the second mortgage. While the collateral might be impaired, it looks like the note for your second mortgage is still in tact and they are fully permitted to sue you for the same.
    Answer Applies to: Florida
    Replied: 10/24/2012
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