What will happen if my home in mortgage is being used as a collateral and it was being forclosed? 12 Answers as of January 16, 2014

I had mortgage on a home. I borrowed money from a 2nd bank with home as collateral. Got divorced, filed chapter 7, discharged from all the debts on both loans. Bank that held the 2nd is foreclosing on the house, they are no longer holding me liable, however what will happen when they foreclose and the 1st bank wants its money? My ex had the deed in his name on the loan. He did a notification and the bank refused to allow an assumption so I'm still listed on the loan. I have my credit back on track and have been per-approved for a home loan. I don't want to buy another house if the 1st bank can place a lien on it or try to take it. What do I do?

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GARCIA & GONZALES, P.C.
GARCIA & GONZALES, P.C. | Richard N. Gonzales
As long as both loans were listed on your bankruptcy filing, you will be fine. Call the attorney who did your first bankruptcy, or simply look at your paperwork to make sure both banks were listed as creditors. You can also call the Bankruptcy Court for copies of your complete file. If the creditors were omitted, contact an attorney to re-open your case, and amend your list of creditors to include the banks.
Answer Applies to: Colorado
Replied: 1/16/2014
Stuart P Gelberg
Stuart P Gelberg | Stuart P Gelberg
The 2d will have to pay off the first so you won't have to pay them. Your discharge would prevent them from coming after you anyway.
Answer Applies to: New York
Replied: 1/16/2014
Stephens Gourley & Bywater | David A. Stephens
You are discharged on both loans. They cannot pursue you. The second usually will cut a deal with the first when it forecloses.
Answer Applies to: Nevada
Replied: 1/16/2014
Garner Law Office
Garner Law Office | Daniel Garner
You should go ahead and buy your new house. The first mortgage holder on your former home must get the balance owed them from the foreclosing second lienholder. The first mortgage holder cannot enforce the promissory note you signed, because of your Chapter 7 bankruptcy. The foreclosure is now entirely your ex's problem, and you can go on with your life. Congratulations!
Answer Applies to: Oregon
Replied: 1/15/2014
A Fresh Start
A Fresh Start | Dorothy G Bunce
After a foreclosure by a 2nd mortgage company, the party that successfully bids on the property must pay off the entire 1st mortgage before the 2nd mortgage company will be paid one penny.
Answer Applies to: Nevada
Replied: 1/15/2014
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    If you live in California the fist can never come after you on a purchase money loan. When the second forecloses they have to pay the first to keep it from foreclosing. The second would only do that if there was equity in the property. You should see a lawyer to talk about this.
    Answer Applies to: California
    Replied: 1/15/2014
    LAW OFFICES OF CRAIG BURNETT | Craig Alan Burnett
    Nothing. Your bankruptcy discharged that debt. Further, even if you had not filed bankruptcy, California's anti-deficiency laws will protect you from any action by the first mortgage as long is it was purchase money.
    Answer Applies to: California
    Replied: 1/15/2014
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    Since you filed bk you discharged your obligation owed on all debt at that time. You will have a foreclosure on your credit report subsequent to your bk filing notation. However, the bank cannot collect any deficiency from you.
    Answer Applies to: Nevada
    Replied: 1/15/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    Since you have been discharged of the debt, they can not attach to any other assets.
    Answer Applies to: New York
    Replied: 1/15/2014
    David Kass | David Kass
    They can bring an in rem actions.prop. And you will lose house.bk cannot protect from that.
    Answer Applies to: New York
    Replied: 1/15/2014
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    If you filed a Chapter 7 case and listed both loans in the schedules of that petition and provided notice of your bankruptcy petition to the holders of the senior and junior claims secured by your house, both debts were discharged when you got your discharge. In addition, if the loan secured by the first deed of trust against your home is the original loan used to buy the house (that is, it is "purchase money"), California's anti-deficiency statutes prevent lenders from collecting a deficiency from you anyway. Nevertheless, the discharge should be enough, whether the senior loan is purchase money or not, and nobody can put a lien on your property based on a pre-petition debt discharged in your bankruptcy case. You should not let that dictate whether you buy another house now. If you have the ability to buy it, do not delay.
    Answer Applies to: California
    Replied: 1/13/2014
    Barr, Jones & Associates LLP
    Barr, Jones & Associates LLP | Andrew Brasse
    Since you gave up the home through your bankruptcy, you were discharged on both liens against that house. Therefore, neither lender will be able to come after you in any capacity, including trying to place a lien against your new home. They cannot collect from you.
    Answer Applies to: Ohio
    Replied: 1/13/2014
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