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On an investment house am I liable for a 2nd after a forclosure on the first if its the same bank?

Apple Valley, CA |
Filed under: Real estate

I bought an investment home, it was not my primary residence. When I bought the house the bank put me into a first and second loan with the same bank to qualify with 5% down. Shortly after I bought it they sold the loan.
I let go into forclosure a year ago. The 1st got most of their money I owed them but the bank says they received Money for the 1st but not the 2nd loan. Its the same Bank. I didn't refinance. I didn't take out a equity line of credit.
The bank keeps calling hoping I have won the lottery I guess, to collect money on the second.
I am wondering if they can sue me for the money owed on the 2nd at any time in the future. They are not curently doing so but want to know if any years down the road they can sue me, than garnish wages, etc?
Thank you for your help.

Attorney Answers 3


  1. Eventhough the first and second are loans with the same bank, they are separate loans. If the bank foreclosed on the property with the first, that doesn't eliminate your obligation on the 2nd. The 2nd is still 'out there' as a debt you are obligated to repay.

    There are other questions that need to be answered, but yes, the bank can very likely sue for the money owed on the 2nd at a future time.


  2. Eventhough the first and second are loans with the same bank, they are separate loans. If the bank foreclosed on the property with the first, that doesn't eliminate your obligation on the 2nd. The 2nd is still 'out there' as a debt you are obligated to repay.

    There are other questions that need to be answered, but yes, the bank can very likely sue for the money owed on the 2nd at a future time.


  3. Although the previous poster is generally right, there is caselaw to support the claim that because both notes are with the same bank, that the bank in foreclosing on the first had made an affirmative act which could negatively affect their deficiency rights.

    If you would like to discuss you options more, please feel free to email me at andrew@stilwellassociates.net

    This is informational only and is NOT intended to create any attorney client relationship between the asker of the question, any reader of the answer, Stilwell & Associates, Andrew Stilwell, or its affiliates. This information is given with insufficient facts to give the asker of the quesiton and any reader of the answer sufficient basis to reasonably rely on this information. This notice is given to disclaim any such attorney client relationships until such time as a valid express written services agreement is executed by all parties and proper retainers have been deposited.

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