Legal Question in Real Estate Law in California

My second motgage from Patelco credit union has been charged off since July 2010 as I was late for 6-7months. I informed them that I will be paying it as soon as I get my withdrawal from my 401K for the said amount. However, they charged off my second mortgage while my check was in transit, and by the time they receive it it has already been charged off. To make the long story short, they accepted the check and advised me to keep paying my second mortgage to them and will let m know if they can reverse it. I have been paying it since then and I am current with my first and second mortgage inspite of the fact thatr I have been unemployed for over two yars now. MY QUESTION: WHAT WILL

HAPPEN IF WE STOP PAYING OUR SECOND MORTGAGE THAT HAS BEEN CHARGED OFF? By the way, when I checked my credit report last week, I found out that Patelco reported my second mortgage as charged off since July2010.


Asked on 2/28/11, 11:13 am

1 Answer from Attorneys
David Gibbs The Gibbs Law Firm, APC

The term "Charged Off" is not a legal term, it is a credit reporting term which indicates that the bank believes the loan to be uncollectible. In no way does it affect the ability of the bank to continue to attempt to collect the loan. Particularly, if this is a second mortgage or Home Equity Line secured by a Deed of Trust, even if they "charged off" the debt, they retain a security interest in your home and may foreclose the property subject to the existing first mortgage.

*Due to the limitations of the LawGuru Forums, The Gibbs Law Firm, APC's (the "Firm") participation in responding to questions posted herein does not constitute legal advice, nor legal representation of the person or entity posting a question. No Attorney/Client relationship is or shall be construed to be created hereby. The information provided is general and requires that the poster obtain specific legal advice from an attorney. The poster shall not rely upon the information provided herein as legal advice nor as the basis for making any decisions of legal consequence. As required by 11 U.S.C. �528, we must now disclose that, "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. Assistance we provide with respect to Debt Relief may involve bankruptcy relief under the Bankruptcy Code."

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Answered on 3/02/11, 2:05 pm


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