2nd Mortgage after Short Sale (Statue of Limitations)

[ficojoe]

I have two questions concerning a situation where a person goes through a short sale, haivng a second mortgage, where the second mortgage company doesn't forgive the balance of the loan, then the borrower moves out of the state shortly after the short sale.

My questions are:

1) What state's Statue of Limitations apply for the collections? The state where the loan was made and where the loan was defaulted on, or the state where the borrower currently reside?

2) What date are the statue of limitations counted from? When the loan was 30 days late? 60? 90? Or at the time of the short sale?

[gdale6]

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@ficojoe wrote:

I have two questions concerning a situation where a person goes through a short sale, haivng a second mortgage, where the second mortgage company doesn't forgive the balance of the loan, then the borrower moves out of the state shortly after the short sale.

My questions are:

1) What state's Statue of Limitations apply for the collections? The state where the loan was made and where the loan was defaulted on, or the state where the borrower currently reside? Can be either of these and possibly the state the creditor is incorporated in.

2) What date are the statue of limitations counted from? When the loan was 30 days late? 60? 90? Or at the time of the short sale? SOL runs from the DoFD that leads to the CO, so the 30 day late that occurs and the account is never again brought current is the universally accepted date.

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[Anonymous]

Whether the property was in a "no recourse" state may be a factor as well. My understanding is that you cannot be pursued for a forclosure deficiency in a no-recourse state. Whether that aslo applies to a second in a short sale, I have no idea. Something you might want to investigate.