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Is my second mortgage now uncollectible?

San Mateo, CA |

My house is underwater; $900K first mortgage and $250K second. Haven't paid either mortgage in 51 months. First mortgage lender (Chase) is in the process of (slowly) foreclosing. Second mortgage lender (private lender) filed an NOD 49 months ago, but has done nothing since that date. Given that the SOL in California is four years, can this Second Lender come after me for the $250K after Chase's foreclosure is completed? And Question #2: If I am able to work out a loan mod with Chase and bring the first mortgage current later this year, can Second Lender foreclose a couple years later...or will that $250K lien cloud the title if I try to sell the property in five years? Thanks!

Attorney Answers 2


The 2nd mortgage is a lien on your house. Even if you are not paying it and they filed an NOD, the SOL has not started running yet. The 2nd mortgage lien holder can just wait you out until there is either a foreclosure or you sell. Unless the loan is discharged, reconveyed, paid off or foreclosed, it will be on title.

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Please get a consultation with a competent bankruptcy attorney in your local area. You will want to discuss with them something called a lien strip. I can't tell from these little facts here if this will work for you but if it could, it could be God sent. Whether a lender can go after you post foreclosure has a lot to do with whether the second loan is a recourse loan or not, again something to bring up with your attorney. If this is the only debt you have and you're willing to walk away then a short sale could be the solution, particularly if the second is a recourse loan. You really want someone to sit down with you, review your assets, your debts, your income, your living expenses and give you comprehensive advice, not quickie answers with limited information about your situation. Many attorneys offer free consultations. Going now could give you time to create a strategy rather than waiting until last day. Hop on this. :-) Good luck.

I am not YOUR lawyer. Don't rely on answers to questions as legal advice. For legal advice contact a Bankruptcy Attorney for a consultation. Tokarska Law Center is a Federal Debt Relief Agency representing individuals and businesses in filing for bankrutpcy protection under the U.S. Bankrutpcy Code. Kathryn U. Tokarska is a San Diego Bankruptcy Attorney, owner of Tokarska Law Center, 185 West F Street #100, San Diego, CA 92101, (619) 285-1992

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Kathryn Ursula Tokarska

Kathryn Ursula Tokarska


BTW, be sure they also discuss potential settlement options on your second, this is only something to discuss if you have source of funds to settle.

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