NC is a non-recourse state I understand that but what happens if you have a second mortgage?
Thursday, 19. August 2010
Both loans are with the same bank/company? Can they still get you for the second one, I know they can’t for the first and will/do they even take the time to go to court? The second loan is right at 15,000 I think might be just a little bit more but not by much.
KL Says:
It depends if it was used to purchase the property or not. From what I understand, NC does not require non-recourse loans even though it’s a non-recourse state. You’ll most likely need to contact a real estate attorney to determine if your 2nd mortgage falls under recourse or not….
real estate guy Says:
It doesn’t matter on the 2nd. You will be 100% responsible. In addition, while the IRS will not tax you as income on the 1st, THEY WILL ON THE SECOND.
kemperk Says:
in all states that I know of, the 2nd disappears as the holder must buy out the first.
My Take on It Says:
The second is fair game. They can sue you for that one.
Also, on the first, if they decide to, they can issue you a 1099 for the forgiven part of the mortgage which you would have to claim on your taxes as income. Non recourse doesn’t necessarily mean you won’t pay someone!