After the housing collapse in 2008, many Americans were faced with foreclosure. This devastating reality became a bigger nightmare for those that held a 2nd mortgage or home equity line of credit (“HELOC”). What many of these folks did not realize is that they were still on the hook for those second mortgage debts. Depending on which state you reside in, lenders are permitted to pursue you for the 2nd mortgage or HELOC debt after foreclosure.
This article in the Washington Post explains the basics of dealing with this predicament after foreclosure.
As this article points out, lenders may have written these debts off of their books and may appear to be listed as “charged off” on your credit report. Beware, this does not mean you no longer owe this debt. These debts are often sold to debt buyers who are within their rights to come after you. If you are facing this problem, you should immediately consult with a debt settlement attorney. An attorney that specializes in the area of mortgage debt settlement can often negotiate a reduction in the amount that you owe and represent you if you are facing a lawsuit.
Kevin Fallon McCarthy
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