I am assuming that the property that you lost to foreclosure had no equity.
Once the property it is lost to foreclosure and there was not enough equity to cover any junior mortgages (liens) these liens become unsecured personal debt and the creditor have the right to pursue payment of unpaid debt.
In addition to Grace statement, the Mortgage Debt Relief Act of 2007 ( which is set o expire by the end of 2012) is for non-recourse loans (purchase money).
This Act mainly applies to the senior mortgage but it could also apply to any junior mortgages if they decide to cancel the debt by reporting it to the IRS as a loss. If this is the case they will send 1099-C.
Most homeowners believe that by letting the home go into foreclosure any debt will be automatically cancelled which in most cases is not.
There are some other cases where you can force cancellation of these debts but as anything it requires an examination of your personal situation as it changes in a case by case basis.
Many of these 2nds mortgages that have become unsecured debts are been sold to collection agencies and I've seen it where some of them are taking court actions while most are going under the radar as they are going dormitory for now but they could pursue once the economy and the housing market is out of the current mess.
If you buy another home and if your current unsecured debt (which appears to be the case) creditor brings you to court and a judgement is awarded to them, then they could put that judgement against your new home.
My suggestion would be to run your credit (as Andrea suggested) and see it that debt still active. If so then there are some other ways to deal with it.
I if you need assistant and better understanding you can follow any of my peers suggestions or contact a bankruptcy attorney and/or contact me for a more in-depth explanation and I can refer you to an attorney depending your personal situation.
Or you can go to the IRS website and read some more about the mortgage debt relief act of 2007 by going to this IRS link
Hope this helps and good luck.
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