80/20 Loans

[jose06]

My GF house went into forclosure last month. Had one of those 100% financed mortagages. One loan was over  400K and the other about 100K. The smaller loan was sent to collections and they are calling relentlessly,trying to collect. Is this normal and is there any thing that she can do since the house forclosed on and she is finished financially ?

[203bravo]

The 2nd mortgage has essentially turned into a unsecured loan.  The primary mortgage will reap any benefits of the proceeds (if any) from the house selling.  Then they will most likely hold her responsible for any deficit amounts.  Just because the house was foreclosed does not mean that she is no longer responsible for the loans.  At this point here best option would to seek advice from a credit counselor to see any any arrangements and budgets can be made to get the loans paid... Or worst case meet with an attorney for advice on BK.

[Chopbrocoli]

For that type of balance, the collection agency will be after you like no other and will do anything possible to get that money. If I were you, I would read the FDCPA and make sure your rights are not violated.

[Anonymous]

The best thing you can do is speak with an attorney and also read the link titled "State Resources" and look up your state statutes relating to foreclosures and the such.