Second mortgage on foreclosed home and impact on obtaining a new mortgage

[Lemmus]

...IL law is clear that they cannot come after you ...google the case law ...the law is on your side ...follow the process in the Rebuilding Credit forum (using the templates there) to require they validate the debt or delete it ...attach a copy of the relevant statute along with a copy of the Sherrif's sale (it will be in county records) as your supporting docs ...send it via USPS with signed receipt required ...they have 30 days to validate ...if they do validate, file a complaint under the FCRA against both them and the CRAs for false reporting ...the FCRA has to investigate and clear it ...it can fine all of them ...hth

[Anonymous]

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@Lemmus wrote:

...IL law is clear that they cannot come after you ...google the case law ...the law is on your side ...follow the process in the Rebuilding Credit forum (using the templates there) to require they validate the debt or delete it ...attach a copy of the relevant statute along with a copy of the Sherrif's sale (it will be in county records) as your supporting docs ...send it via USPS with signed receipt required ...they have 30 days to validate ...if they do validate, file a complaint under the FCRA against both them and the CRAs for false reporting ...the FCRA has to investigate and clear it ...it can fine all of them ...hth

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I'm finding mixed signals in legal articles. Some of them state that the loan must be reported as foreclosed, and that Illinois won't allow them to come after the mortgagor (me).

Others are saying that since Illinois is a recourse state, the second mortgage has the option to come after the mortgagor. The foreclosure expunged the lien, but not the loan itself, so charge-off is the correct reporting and the junior lienholder could decide to file for a default judgement.