How do we know if our second mortgage company is planning anything against us?

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How do we know if our second mortgage company is planning anything against us?

We have not heard from the company in 2 years, when we pull a credit report it states that the account is at $0.00 does this mean that they just wrote it off or they are going to take action against us?

Asked on July 20, 2011 Minnesota

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

From you question, I presume that the first mortgage company foreclosed on your home? If so, then in most States in this country, as a matter of law, the second mortgage was wiped out by the senior loan in the foreclosure.

The issue is whether or not the second loan secured by a second mortgage was a "purchase money" loan or not. Meaning the second loan was acquired to purchase the home that was lost in foreclosure. If it was "purchase money", then the laws in most States in this country means the second mortgage has no recourse against you. Meaning, it cannot legally claim you owe it on the loan.

If your credit report shows that nothing is owed on the second mortgage and you have not heard anything from the company who held the second mortgage for more than two years, then most likely the second mortgage was "purchase money" and its holder has written it off and will not be pursuing and future action against you.


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