NEED HELP - Important Question
I have a home I am interested in purchasing. The owner has a $45,000 first mortgage and the property is worth about $145,000. It needs a little work (kitchen, bathroom, new carpet and paint).
Here's my problem:
I found out that the owner has a second mortgage on the property for $21,000. The owner stated he filed a chapter 7 bankruptcy 3 years ago and included the second mortgage, not the first, in the bankruptcy. He showed me a 1099 for the amount of the 2nd mortgage which he filed on his taxes. However, it still shows up on the title of the property.
My question:
Since the 2nd mortgage company sent the owner a 1099 in the amount of balance due on the 2nd mortgage shouldn't it also be removed from the title? If so, how does the owner go about removing the 2nd mortgage from the title in this instance?
He needs to get a release of lien from the holder of the 2nd. He can show the title company the 1099 form, but I'm not sure the title company will waive the 2nd based on just 1099. It's worth trying, but the fool-proof way is to obtain a written release from the 2nd.
It sounds like the 2nd mortgage company has charged off the debt. The lien will remain in place until they file a mortgage satisfaction or reconveyance if it was a trust deed. Offer the 2nd some cash to release their position and chances are that they would be willing to negotiate.
I've found out that this second mortgage was purchased by Household and that is who sent the 1099. However, the originator of the second mortgage, Providian, is the one who is on the title.
Does this make a difference? Who should the owner be speaking with Household or Providian?
i would contact household first and see what they will do. none maybe very willing to help you may have to have a attny. to get the job done. having to go to court always gets there attention. you can hint legal action and it may help like { are we going to have to take this to court to clear this up} they may bend and help at this point or say "probably have to go to court" they have lost money on the deal and have no desire to put more time or money {this is where the threat of court comes into play} into the deal...kenmax