What are my legal rights if my house is foreclosed and the second lender is still harassing me for the loan amount?

I believe our loan was a non-recourse, money purchase loan. We took out an 80/20. A new lender took over the primary (80) and a second lender took over the second (20). The house foreclosed 9 months ago and the second lender has not stopped calling. We sometimes get up to 5 calls per day (tonight I had 3 calls within an hour). We never took any money out on the loan; it foreclosed on it’s original terms. How do we get them to back off and stop? And do we owe this money if they have already taken the house?

Asked on September 19, 2011 under Bankruptcy Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You need to check out what really happened here.  If the loan is as you say - a non-recourse purchase money loan - then the lender has no rights here to come after you one the secured property went in to foreclosure and was taken away.  Did you by any chance refinance the loan?  Because that would have converted it from non-recourse to recourse.  I would take a look at your documents - the loan, the foreclosure - and I would give a call tot he state banking commission on the matter.  Let them know that you are being harassed by the lender.  File a complaint.  They should investigate.  And try the state attorney general's office as well.  Good luck.


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