Dated Second Mortgage questions

[Platinum25]

I hit a bit of a financial wall years ago when the economy tanked and felt, at the time, that the only way I could survive was to stop paying my first and second mortgages on my house in order to qualify for HARP.  So that's what I did.  Fast forward....I successfully refinanced my first home loan with the same mortgage lender and have been paying on time for years.  I stopped paying the second mortgage as that's what I was instructed to do until the first mortgage was taken care of.  The second mortgage lender sold my loan and it's been in collections for a couple years now.  I get the same letter in the mail each month reflecting how much I owe the mortgage company.

Now, the second mortgage, while in collections for years, has not shown up on my CR.  The second mortgage loans show closed with 0 balance due and my credit has since recovered from not paying my mortgages for awhile during the HARP process.  My question is, will this collection for a second mortgage, eventually show up on my CR?  I believe at one point I was either told by someone or read somewhere that collections cannot come after you or post on your CR for a second mortgage but that doesn't seem logical to me.  

I just received an offer to pay off the collection at a drastically reduced number but it's not like I have that kind of cash lying around.  I would hate to have worked for this many years to rebound my credit just for it to get killed again by this second mortgage collection hitting my CR.  

Sorry for the ramble, but I appreciate any feedback offered.

[StartingOver10]

You actually have a larger, more important issue with the second mortgage:  there is a lien recorded on your home for the second mortgage.

The CR issue is minor in comparison.  If you manage to find the funds to pay off the second at the substantially reduced rate make sure you receive a Satisfaction of Mortgage to remove the lien from your home. The lien doesn't go away without the recorded satisfaction.

[Anonymous]

I was in a simalar situation except we ended up doing a short sale.  Now 4 years later the old 2nd has been sold a couple of times and is now showing up on Experian as a collection.  Prior to this year it never showed up and I never heard from anyone.  There are companies out there that buy these old debts for pennies and try to collect a few dollars on them.  

You do have a possible lien still on the title from the old second unless that got wiped out in the refinance.  Not sure how that all works.If it where me I try and settle for a small sum in exchange for them not reporting on your CR.

[StartingOver10]

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@Anonymous wrote:

I was in a simalar situation except we ended up doing a short sale.  Now 4 years later the old 2nd has been sold a couple of times and is now showing up on Experian as a collection.  Prior to this year it never showed up and I never heard from anyone.  There are companies out there that buy these old debts for pennies and try to collect a few dollars on them.  

You do have a possible lien still on the title from the old second unless that got wiped out in the refinance.  Not sure how that all works.If it where me I try and settle for a small sum in exchange for them not reporting on your CR.

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Dave, so how can your 2nd be reporting as a collection?  In order for you to finalize the short sale, both of your lienholders have to agree to a short payoff. The 2nd's were getting very small amounts but to get anything they have to agree to it. Pull out your paperwork on the SS.  It is most likely your 2nd doesn't/didn't have the ability to collect on the debt once they accepted the short payoff.

I would report them to the CFPB. Check your state's deficiency collection statutes first. Or, better yet, get a good consumer attorney - I bet you can get damages.

[Platinum25]

Thanks for the feedback.  I am working with the Collection Agency right now on the settlement amount.  The paperwork I have reads as follows:  "Upon our timely receipt and clearance of the entire settlement amount we agree to close the account as settled and to notify the appropriate parties to execute a release and a discharge of the Deed of Trust/Mortgage, as well as forego all rights to pursue a deficiency judgment."  I assume this language is the same as that of a Satisfaction of Mortage that you mentioned?

[StartingOver10]

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@ChiTownTimmay wrote:

Thanks for the feedback.  I am working with the Collection Agency right now on the settlement amount.  The paperwork I have reads as follows:  "Upon our timely receipt and clearance of the entire settlement amount we agree to close the account as settled and to notify the appropriate parties to execute a release and a discharge of the Deed of Trust/Mortgage, as well as forego all rights to pursue a deficiency judgment."  I assume this language is the same as that of a Satisfaction of Mortage that you mentioned?

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Yes ^^^ in red. So the SS has occured or not? If it has occurred already the short sale approval letter would have similar language which would prevent the CA from collecting anything at all. If it has occurred, contact the title co attorney that handled the short sale.

[Platinum25]

No short sale, i'm still in my house.  I used HARP to refinance my first mortgage and i'm good there, no SS, no Foreclosure.  This second mortgage was sent to the CA years ago and I just keep getting the same letters with a balance due each month.

[DallasLoanGuy]

are you looking for a mortgage?

if not then the credit forume is the best place for this question.

if you are.... then startingover is right. doesnt matter if it isnt on the credit report. there is a public record of a mortgage and you arent paying it.... so that will be a problem for a future loan

[Platinum25]

I've reached a settlement agreement with the CA that represents the lender for the second mortgage.  Hopefully they hold true to their word and this all gets cleared up.  I'm not looking for a new mortgage right now but eventually will in the next 5 or so years.