The second mortgage lender does not need to get a deficiency judgment, even if the lender was also the first mortgage lender. The statute of limitations is indeed 4 years from the last date you paid or made a promise to pay. Just because they don't sue does not mean they give up their right to put this on your credit report.
DISCLAIMER The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the Commonwealth of Pennsylvania. Responses are based solely on Pennsylvania law unless stated otherwise. James S. Tupitza 212 West Gay Street West Chester, PA 19380 610-696-2600
The second loan is now rightfully listed as an unsecured loan. This means it is available for discharge in a bankruptcy proceeding.
Also, just because they cannot sue for the debt does not mean they are required to remove it from your credit report. It is still owed despite them not being able to sue to collect it.