Foreclosure - 2nd Mortgage

Reply

  #1  
Old 04-22-12, 06:07 PM
Member
Thread Starter
Join Date: Apr 2012
Posts: 1
Foreclosure - 2nd Mortgage

About 8 years ago I bought a house with an acquaintance. The situation did not work well, and I moved out. We were unsuccessful selling the house, and then the real estate market crashed and the value plummeted by over a third. I subsequently purchased another home and my acquaintance remained in the home and made the payments.

Recently, my acquaintance walked away from the house when she met a man they purchased their own home.

The house has gone into foreclosure. The loan on the house was an 80/20 loan and I live in Minnesota. As I understand it, we could be pursued by the bank for the 20% loan. I received a letter threatening legal action if I do not respond within 10 days.

I'd like to do the right thing, but I certainly don't have what amounts to over forty thousand dollars.

I have several questions, and would be very grateful for any information:

- How likely is it that the bank carries out their threat?
- If the bank does pursue this, what would be the result? Would I need to file bankruptcy to pay off the note immediately? Would a monthly payment type of settlement be sought?
- Would both of us be responsible for an equal share?
- My biggest question is this: should I contact the lender? I don't really know what I would tell them, other than that I can't afford to pay off the loan. But perhaps as much communication in this situation as possible is a good thing?

Any and all advice would be truly appreciated.
 
Sponsored Links
  #2  
Old 04-23-12, 03:20 AM
chandler's Avatar
Banned. Rule And/Or Policy Violation
Join Date: Dec 2005
Location: USA
Posts: 39,968
Welcome to the forums! Realize this is not legal advice.
* It is not a "threat", but a promise of action. They will pursue it.
* Filing bankruptcy won't pay off the loan.
* It depends on who is on the loan....one, the other, or both.
* Definitely contact the lender. Tell them your situation. Work something out. The worst thing they can do to themselves is acquire more property in a depressed economy. They don't want more.

Good luck with your endeavor.
 
  #3  
Old 04-24-12, 05:34 AM
Group Moderator
Join Date: Oct 2004
Location: WI/MN
Posts: 18,715
There are two people on the note, the bank is going to pursue whichever party they think is more likely to pay (or both of you).

Not to pile on to your woes here but I wanted to point out this is one example of what can happen and thus part of the reason I don't support people who are not married to each other buying a house together.
 
  #4  
Old 04-24-12, 06:01 AM
Member
Join Date: Apr 2012
Location: USA
Posts: 3
don't panic!

Sorry, I am new to this forum, and am not sure where it tells me where you are from. I was going to post my question but saw your post.
You said the home is in foreclosure, has it already foreclosed?
Are you in a state that has a redemption period?
This does make a difference.

I can't give you legal advise, but if the foreclosure hasn't happened yet, and the "aquaintance" is willing to work with you, it is possible to minimize the damage.

If it already foreclosed, and you are in a recourse state, the lender does have the right to pursue a deficiency. They will do this however they can to either/ both parties who signed the note.

Before filing bankruptcy and having that haunt you for up to 10 years, you will want to look into other options.
 
Reply

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Thread Tools
Search this Thread
Display Modes