2nd mortgage question

[jagman123]

What is the name of your state (only U.S. law)? GA


I have a primary mortgage let’s say $500K, and have a second for say $100K thus equaling 600K total. The $100K second stopped having payments made last year, and now shows up on my credit as a charge off. I want to sell my home for $500K. With the aforementioned scenario, can I sell my home for $500K without paying the second, or would I have to come out of pocket the $100K? I am simply thinking about dumping the home for what is owed on the primary to avoid foreclosure. Thanks.

[FlyingRon]

A charge off means nothing to you. You still owe the money. Unless the second mortgage company was extremely stupid they haven't released the lien. You won't be able to convey clear title until you pay them off.

Further, chances are that your second is still a recourse note, so even if the house is foreclosed upon you still can be held liable for the deficiency.

[jagman123]

Great, thank you very much for the information.

[Whadamess]

Well, the general opinion is to pay off your debts regardless..

that being said... has the 2nd filed a lien on your property? Typically lenders will have you execute a Deed of Trust or Mortgage that gets recorded against the property. If that is the case, you wouldn't be able to sell it unless you could clear title of the liens.

[dmiller12]

[quote]has the 2nd filed a lien on your property?QUOTE]

We can make that assumption since she describes it as a mortgage. If it wasn't a lien on the property it wouldn't be a mortgage - unless failing to record the lien was in error. It would just be an unsecured loan or line-of-credit.