NC is a non-recourse state I understand that but what happens if you have a second mortgage?

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Both loans are with the same bank/company? Can they still get you for the second one, I know they can’t for the first and will/do they even take the time to go to court? The second loan is right at 15,000 I think might be just a little bit more but not by much. An we owe 89,000 left on the house after 10 years.

My grandfather paid off the house for my dad and then my dad took out the a loan for a second mortgage. When my grandfather died he gave me the house. The next mortgage payment is due in January. If I am going to be paying for this loan how do I get it out of my fathers name? And will I be paying off his credit? I was told that if the house had a deliquent tax then I could pay that and the house would be put in my name. This is confusing and I don’t know what to do. Help me please…

  1. Reply
    Ryan M
    February 23, 2011 at 9:20 pm

    Second mortgages are RECOURSE loans. Yes they will take the time to take you to court if you stiff them. If someone owed YOU $ 15k….would YOU let them get away with it??

  2. Reply
    Wolf Harper
    February 23, 2011 at 9:22 pm

    I’d agree the second is probably a recourse loan, I won’t agree that it’s a sure thing they’ll go after you in court. Lenders are in the business of lending, and as such they get a lot of defaults. They know all to well you “can’t get blood from a stone”, even with a court judgment.

    The problem is, it costs a lot to go to court. They can easily have $ 5000, $ 10,000 of court costs… and then the borrower also has to spend money they don’t have defending themselves… and all this lawyer money is money poured down a hole, that can never be gotten back. And THEN, they get into court and what happens? The judge calls them into chambers and yells at them for cluttering up his court with a nonsense case they should have settled. Happens all the time.

    OK so finally they get a court judgment. What happens? PIFF, the borrower declares bankruptcy. That’s more money the borrower is giving to lawyers instead of to the bank. So you can see why very often, suing someone is a losing game for the bank.

    Sometimes, all you have to do to make a debt go away, is wait for the statute of limitations to run out.

    But remember — anytime a company formally forgives (writes off) a debt, the IRS treats that as INCOME, and wants income tax on it. So figure if you have $ 15,000 written off, count on owing between $ 3000 and $ 5000 to the IRS and the state. They’ll want cold hard cash, naturally. And if it’s a big fraction of your annual tax bill, they’ll also want quarterly payments.

  3. Reply
    February 23, 2011 at 9:53 pm

    Honestly consult a lawyer

  4. Reply
    February 23, 2011 at 9:54 pm

    See a real estate attorney.

  5. Reply
    February 23, 2011 at 10:26 pm

    I don’t understand. If the house was in your grandfather’s name and he left it to you, how did your father get a loan based on the fact that he owned the house? If you don’t pay the delinquent tax, the house can be sold by back taxes. The delinquent taxes that were in your grandfathers name, should have been paid out of the estate. You need to set down with maybe the estate attorney and get this straightened out.

  6. Reply
    February 23, 2011 at 10:35 pm

    You can do a “gift of equity loan” basically its a way for your dad to refinance and for you to take over for the price of the existing owed loan amount. Talk to a mortgage professional in your area to help you. Shouldn’t cost you anything out of pocket. PAY THE TAXES that could really damage your fathers credit since he has the mortgage in his name. Also , make the payment with a check with your name on it. Not paying the mortgage can knock your fathers credit scores down 100 points. If theres a mortgage still on the house, it will have to paid, whether its in your name or his, don’t hurt his credit in the process if you can help it.

  7. Reply
    business creature
    February 23, 2011 at 11:23 pm

    put your self on the deep of trust

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