If you file for Chapter 7 bankruptcy, you cannot get rid of second mortgages, home equity lines of credit (HELOCs), or home equity loans. Filers in the Eleventh Circuit Court of Appeals, are no longer able to strip off (remove) these types of liens in Chapter 7 bankruptcy.
How can I get rid of a second mortgage?
Filing for bankruptcy can eliminate your second mortgage debt. If an appraiser determines the value of your home is less than your first mortgage, or is upside down, Chapter 13 lien stripping may be possible. The bankruptcy court essentially converts your second mortgage into an unsecured debt.
What is the statute of limitations on a second mortgage in California?
Unlike credit card debts or unsecured loans, debts secured by your home don’t hit the statute of limitations quickly. In California, the statute on a mortgage is 30 years. So all that ignoring this debt and hoping it would go away has done is increase the fees and expenses that the lender is legitimately due.
Can a 2nd mortgage be charged off?
Understanding Charged-Off Second Mortgages
Then, after you stopped making payments on your second mortgage, your second-mortgage lender eventually determined that the debt was uncollectible and decided to charge it off. A charge off usually happens between 180 and 240 days from the date of your last payment.
Can my second mortgage be forgiven?
Your second lender may voluntarily forgive your second mortgage, including a home equity line of credit or home equity loan. The lender writes off all or a portion of the loan amount as a bad debt for a tax deduction.
How long do you have to pay back a second mortgage?
Second mortgage loans usually have terms of up to 20 years or as little as one year. The shorter the term of the loan, the higher the monthly payment will be.
Can I sell a house with a second mortgage?
So, can you sell your house with a home equity loan or second mortgage? The short answer is: “yes.” Whether you have a home equity loan or another type of second mortgage, it shouldn’t stop you from selling your house.
How long does a second mortgage charge off stay on your credit report?
seven years
How long will the charge-off stay on credit reports? Similar to late payments and other information on your credit reports that’s considered negative, a charged-off account will remain on credit reports up to seven years from the date of the first missed or late payment on the charged-off account.
Is California a non recourse state for second mortgages?
In California purchase money loans made on your home (note: not second home or investment properties) are non-recourse. The mistake comes when you refinance your second purchase money mortgage. Because it is no longer a purchase money loan, a refinance transforms it into a recourse loan.
How long do you have to pay back a second mortgage?
Second mortgage loans usually have terms of up to 20 years or as little as one year. The shorter the term of the loan, the higher the monthly payment will be.
How long does a mortgage lien stay on your property in California?
A lien expires 10 years from the date of recording or filing, unless we extend it. If we extend the lien, we will send a new Notice of State Tax Lien and record or file it with the county recorder or California Secretary of State. We will not release expired liens.
What happens to 2nd mortgage after short sale?
To get clear title following a short sale, the first mortgage lender must get releases from all other lienholders. So if a second mortgage, tax lien, or home equity line of credit is on the property, all have to sign off on the short sale deal—not just your first mortgage lender.
Is it hard to sell a house with a second mortgage?
A second mortgage should have little or no effect on a homeowner’s ability to sell her home. While the effects on buyers are nonexistent, sellers must pay off second mortgages just as they must pay off first mortgages.
What happens when you sell a house with a second mortgage?
You do need to pay your second mortgage when you sell your home. When the deal closes, your home’s sale price should pay off both mortgages, plus selling expenses. As long as you’ve covered those costs, you’ll then be paid the amount of the remaining proceeds.