questions & answers

Question: My house was foreclosed on in 2008; the 2nd Mortgage was not used to purchase the home, and the 2nd Mortgagee has now sold the "note" to a collection agency. If the 2nd Mortgagee never filed or sued me on the deficiency can the collection agency pursue the collection of this debt? Who is the holder of the written contract that I had with the original lender?

Answer: If executed properly, the mortgagee can legally assign its interests in the note to a third party -- including a collection agency. The third party then stands in the shoes of the mortgagee with the same rights and limitations. Because it sounds like it was a junior non-purchase money loan and the senior lender foreclosed, the normal 90-day limitation on deficiency actions does not apply. However, the normal six-year statute of limitations to a written contract should apply, and if this happened in 2008 and they have not yet filed suit, they may be barred by that statute. This general information is not legal advice or a substitute for legal advice. You should consult an attorney for advice that pertains to your exact situation.