when my house has been foreclosed on what happens to the second mortgage?

Asked by Jcdewd, 02571 Tue Aug 16, 2011

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Short Sale Mitigation, LLC’s answer
Short Sale M…, Other Pro, MA,
Tue Aug 16, 2011
If a deficiency is to be pursued, the bank must include a notice of intent to seek deficiency with the required Notice of Sale. This Notice of Sale must be served on the borrowers at least 21 days prior to the actual auction.

Massachusetts judgments are enforceable for 20 years. They can be renewed for another 20 years if you notify the court that the judgment has not yet been satisfied.

An unusual part of Massachusetts law is that to keep your judgment alive, you must get a Writ Of Execution (WOE) from the court, within one year of when you are entitled to get a WOE from that court. If this sounds complicated - the actual text of the law about this is even more complicated.

Massachusetts treats WOEs differently than most other states. WOEs must be obtained from the court with one year, and in general they last as long as the judgment does. If you use a WOE to successfully collect some of the debtor's assets, you have used it up. You must then get a new WOE that shows much the debtor already paid. And you must get this new WOE within five years.

With a WOE, you can attach the debtor's wages or their bank account, or ask the sheriff to levy and sell a debtor's asset. (For details, see chapter 246 of the General Laws of Massachusetts.)

To levy a bank account, you first get permission from the court. Then you take the WOE, with levy instructions, and pay the local sheriff to levy the debtor's bank account

To levy a debtor's wages, you have to mail the debtor notice of the wage levy request by registered mail, to give them at least ten days notice of the planned wage levy. The first $125 of weekly wages are usually exempt. Then you take the WOE, with instructions, and pay the local sheriff to levy the debtor's wages.

You can also use a WOE to levy debtor's personal property such as a car, jewelry, or musical instrument, or their TV set. You don't get to seize the items yourself. You have to pay a sheriff to take and store the items before they are sold at a public auction. Note that this is not always cost-effective.

If the debtor has or will one day have equity in real estate, you can record a lien at the county registry of deeds, in the county where the debtor's current or future property is. If the property is refinanced or sold, you might get paid.

***We are not lawyers*** Please seek legal advice.
Legal Counsel Gilmartin, Magence, and Ross

1 vote
GB Short Sal…, Agent, Boston, MA
Tue Aug 16, 2011
I am not an attorney but I negotiate short sales with all of the major lenders. The second lien holder will file a civil case against you for the total amount owed on the note. In Massachusetts, an execution or money judgment it is enforceable for (at least) 20 years. This judgment will negatively affect your credit score as well as your ability to obtain a loan until it is paid off or you reach a settlement with the debt holder. If it is not too late, you may want to inquire as to the possibility of a short sale. That way, you can negotiate a "short" payoff of your loans in exchange for the lenders agreeing to not seek re-payment of the entire amount owed. If foreclosure is imminent, you may want to contact your 2nd lien holder regarding a settlement before they file a case against you.

Greater Boston Short Sales, LLC
1 vote
Jobass24us, Home Seller, Ware, MA
Wed Sep 7, 2011
Im not an attorney but Im in this situation right now. I spoke with an attorney and yes in this state the 2nd lender can come after you for the amount owed. However, that is if you have assets they can attach. if you have no liquid assets or investments ( 401k's are exempt they can ask you to borrow against it to pay but you are not obligated and they cannot pursue your 401k.) The only way to get out of this, if they decide to pursue you and attach wages, is to declare bankrupcy. That may be a course you may not want to take but you may have to, to prevent them from going after your wages and at this point with the foreclosure your credit is shot so why not protect yourself witht he bankrupcy. I would never agree to carry the 2nd loan after my home is foreclosed. It does not make financial sence.
0 votes
Sarah Goulart…, Agent, Plymouth, MA
Thu Aug 18, 2011
I agree with others, your best bet is to consult an attorney, but having worked with clients in this situation, I would say that the money is still due.
0 votes
Eli Givoni-S…, , Boca Raton, FL
Tue Aug 16, 2011
If you are in a re-course state, the bank can come after you for the deficiency. Consult an attorney to find out about your state. You can do a short sale and keep foreclosure off your credit, as well as, negotiate down the debt. Feel free to call with any questions.

Eli Givoni, Director
Short Sale Department, LLC
Serving all 50 states

MARS Disclosure for General Commercial Communications
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
0 votes
Heidi Zizza, Agent, Framingham, MA
Tue Aug 16, 2011
it goes unpaid and they will pursue payment. I agree that you need an Attorney
0 votes
Richard Shap…, , Framingham, MA
Tue Aug 16, 2011
Technically its still due. I would strongly suggest speaking to an attorney regarding this.
0 votes
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