Financial Information
What determines if the mortgage company after you, will come when you walk away from a 80/20 mortgage?
We have a 80/20 mortgage, and have tried unsuccessfully to refinance. We did get a 3-yr loan modification, but after that the price jump back again. And when they come after my husband, what we do, do?
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#2 written by Ryan M 2 years ago
It depends if you live in a recourse state or a non-recourse state. Recourse means that they can sue you in civil court. 2nd mortgages are pretty much ALWAYS recourse loans…even in non-recourse states. Even if you live in a non-recourse state, the amount of money that you stiffed the bank for is considered income and the bank will issue you a 1099 for that. Some people are hundreds of thousands of dollars underwater. How would you like to pay the taxes on that? Next time, buy a house you can actually afford. Rates are at all time lows and you STILL cannot afford your house payments.
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#3 written by kemperk 2 years ago
excluding unique components to your loan or your state,
if a property goes into foreclosure, the law is simple; the 2nd note holder must buy
out the first to keep his “rights.” if he does not, only the first mortgage survives an
auction sale.[once the 2nd is wiped away, that debt cannot be revived unless someone naively
offers to repay it .......later] - Comment Feed for this Post
The laws of your state come into play. If you are in a recourse state then both note holders can come after any balances owed after you.
Now almost every state allows and second lien holders to get their money owed after foreclosure.