satisfaction of mortgage lien & not pay

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my situation..i have 1st mortgage & 2nd morgage on house..i filed bankruptcy and did not re-afirm either..after bankruptcy discharged i did the making homes affordable and modded the 1st mortgage and have been paying…2nd mortgage i have done nothing..no pay /no mod…i have been expecting 2nd mortgage to forclose when house prices raise.. so i checked court records and about 2 months ago 2nd mortgagee did a satisfaction of mortgage and released lien…exact words(this satisfaction is soley for the purpose of releasing the real property described above from the lien created by the mortgage and is not a release of the obligation under the note as said obligation has not been fully paid) ….what exactly does this mean? do i not have to ever worry about foreclosure?


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Can’t see how they could foreclose after releasing their lien, but they COULD pursue you for the amount owed on the loan. I’d recommend a quick meeting with a local real estate attorney, should be free or at least very inexpensive, and likely worth every penny to have a legal opinion on what to expect.

updated 8 months ago
Ted Rood
1267 6
Answered 8 months ago
Ted Rood
1267 6
8 months ago William Behrens said:
 

Talk to the attorney that handled your BK to confirm this, but if the 2nd mortgage holder released the lien, they cannot foreclose (they no longer have a lien to foreclose upon). The obligation on the note was discharged in the BK, so they cannot try to sue on the unpaid note. Again…talk to your attorney to confirm.


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That is interesting. As to the foreclosure, as Ted Rood stated, the 2nd mortgage no longer exists and thus they cannot foreclose on the property. The release is open ended and they could pursue you for the mortgage amount; but I believe that is highly unlikely. If they had the intent then they would have used the property as a leverage even though there is a 1st mortgage.

The downside here is that your credit will be affected due to the non-payment of this note and it will be highly unlikely that you will be able to qualify for a market based loan within the next 5 years… but considering that they washed away a large debt I think you can deal with it.

(P.S. I also think it would be a good idea to consult with your BK lawyer just to be sure.)

Answered 8 months ago

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