Does a settlement on a second mortgage close it out for good? How? 5 Answers as of August 25, 2015

American Servicing bought my second mortgage from my original loaner. They are offering to settle my $88K second mortgage for $2K. If I do this, does it close this out for good? If I don't what would happen? I don't want them to be able to come back later for more.

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The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
Yes it will be done for good but you will receive a 1099 for the amount settled.
Answer Applies to: New York
Replied: 8/21/2015
Mauritz Van Niekerk, Attorneys at Law
Mauritz Van Niekerk, Attorneys at Law | Christiaan van Niekerk
Yes but make sure to get a local lawyer involved.
Answer Applies to: New York
Replied: 8/19/2015
The Law Office of Aaron M. Schlossberg, P.C.
The Law Office of Aaron M. Schlossberg, P.C. | Aaron Schlossberg
It depends on the circumstances.
Answer Applies to: New York
Replied: 8/19/2015
Patrick W. Currin, Attorney at Law | Patrick Currin
That would be a yes.
Answer Applies to: California
Replied: 8/25/2015
Danville Law Group | Scott Jordan
Yes, if you agree to pay-off the loan for 2K and get a written agreement from AS that the loan is paid in full, they should not come back at a later time and demand more. The down side to a negotiated settlement is that AS will issue a 1099-C for the $86K written off and you will need to claim that amount as ordinary income on your next tax return and have to pay the taxes.
Answer Applies to: California
Replied: 8/19/2015
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