Legal Question in Real Estate Law in California

My second mortgage from Patelco Credit Union was charged off last June of 2010 and was advised by the bank to keep paying it If I want to keep my house - so I did keep paying it. MY questions are: Are we still legally responsible for my second mortgage to keep paying it even though it's been reported to all 3 credit bureaus that it has been charged off? When I tried to access my account on line I was told by the mortgage dept that the loan documents are not available anymore as it was already been charged off. Can the bank charged off a second mortgage without sending us a notification either by phone or mail? Please advise...


Asked on 6/24/11, 1:17 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

"Charging off" a loan is an internal accounting decision/transaction done on the lender's books. It has no impact whatsoever on the borrower's rights or obligations. The lender has the same right to sue after a charge-off that it had before. Possibly doing a charge-off might affect the lender's desire to sue; I can see that a lender might be less interested in collecting charged-off loans -- but don't count on it. You need to assess your risk of being sued under the usual set of factors, including the status of your first mortgage and your overall equity status.

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Answered on 6/24/11, 4:08 pm


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