Legal Question in Credit and Debt Law in Texas
Mortgage Foreclosure Liability Question
In 2001, my condo was foreclosed. I had two mortgages: the 1st was for the mortgage amount minus the down payment, approximately $170K, and the 2nd mortgage was for the portion of the down payment that I was not able to pay at the time of closing, approximately $35K. After the foreclosure, my property was auctioned off. I had assumed that both mortgages had been included in the foreclosure and discharged, however, I later learned that the 2nd mortgage had been sold to an assurance company, and they began attempting to get the money from me. On my credit record, the 1st mortgage status shows as Foreclosure and the 2nd shows as Transferred. I now pay a monthly payment on the transferred account, basically for a property that I no longer own, and was auctioned off. Can the mortgage company do this, and is there any legal way for me to get out of paying this huge sum of money for something that was auctioned off outside of bankruptcy? I do not want to file for bankruptcy.
2 Answers from Attorneys
Re: Mortgage Foreclosure Liability Question
You can file for bankruptcy or you can pay.
From your post it is obvious that the 1st mortgage company foreclosed. They of course have no duty to pay your bills (like the 2nd mortgage) so the 2nd mortgage company suffered a loss and yes, they, or their assignee can pursue you for the balance, plus interest and attorneys fees.
The only way to eliminate such a debt would usually be Chapter 7 bankruptcy. If you are in the Atlanta area and wish to do that clal me at 404-768-3509 or visit www.glenashman.com for one of our pre-appointment worksheets.
Re: Mortgage Foreclosure Liability Question
The obligation to pay the 2nd mortgage remains, even though someone else has the property. If the property sold for less than you owed the 1st mortgage company, they could have gone after you for the unpaid balance.
You have three options. Continue paying until the debt is discharged. Negotiate a lump-sum payout at a fraction of the debt. Or declare bankruptcy.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
