Legal Question in Real Estate Law in Michigan
1st mortgage foreclosed and the 2nd mortgage was not paid or/discharged.
1st mortgage foreclosed and the 2nd mortgage was not paid or/discharged May 2006. House went back to HUD, but 2nd mortgage company will not release lien and told me that I had to continue to pay them or face a garnishment of my wages. Is this true? Can the 2nd still hold the lien and not discharge loan when I was more than 5 months behind on both?
1 Answer from Attorneys
Re: 1st mortgage foreclosed and the 2nd mortgage was not paid or/discharged.
You have a contract with both mortgage companies. Just because one may have forgiven the debt, the other does not have to do so. However, there is a new law out that states if you were 1099ed for any foreclosed debt or discharged that the "income" can be forgiven on your current tax returns.
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