What determines if the mortgage company will come after you if you walk away from a 80/20 mortgage?

We have an 80/20 mortgage and have tried to refinance with no avail. We did get a 3-yr loan modification, however, after that the price will jump back up again. And if they come after my husband, what do we do then?

By | 2013-08-28T05:22:58+00:00 August 28th, 2013|Mortgages Home Loans Interest Rate|3 Comments

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3 Comments

  1. golferwhoworks August 28, 2013 at 8:07 AM - Reply

    The laws of your state come into play. If you are in a recourse state then both note holders can come after any balances owed after you.
    Now almost every state allows and second lien holders to get their money owed after foreclosure.

  2. Ryan M August 28, 2013 at 7:10 AM - Reply

    It depends if you live in a recourse state or a non-recourse state. Recourse means that they can sue you in civil court. 2nd mortgages are pretty much ALWAYS recourse loans…even in non-recourse states. Even if you live in a non-recourse state, the amount of money that you stiffed the bank for is considered income and the bank will issue you a 1099 for that. Some people are hundreds of thousands of dollars underwater. How would you like to pay the taxes on that? Next time, buy a house you can actually afford. Rates are at all time lows and you STILL cannot afford your house payments.

  3. kemperk August 28, 2013 at 6:19 AM - Reply

    excluding unique components to your loan or your state,
    if a property goes into foreclosure, the law is simple; the 2nd note holder must buy
    out the first to keep his “rights.” if he does not, only the first mortgage survives an
    auction sale.

    [once the 2nd is wiped away, that debt cannot be revived unless someone naively
    offers to repay it …….later]

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