If my second mortgage was sold to an investment company for collection andcompany just filed Chapter 7, how does this affect me?
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If my second mortgage was sold to an investment company for collection andcompany just filed Chapter 7, how does this affect me?
The automatic stay was just relieved, and I am in the middle of a short sale. The first mortgage was frozen, but is working with us again now that the automatic stay was relieved. What happens to the second mortgage?
Asked on July 2, 2011 under Bankruptcy Law, California
Answers:
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
First you need to find out who is servicing the loan. It really won't make much difference if the investment company filed bankruptcy because more likely thank not it would be sold to another investor very quickly. Your servicing company is the entity you should be dealing with and also make sure you put everything in writing. If the investment company doesn't sell your loan or its portfolio immediately then you need to negotiate out and see if you can get a break because the investor is in bankruptcy. It may be that the investment company's bankruptcy may place a stay on all proceedings indirectly covering your second mortgage. Before you do anything else, contact the servicer and find out the status. Contact the bankruptcy trustee for the investment company and see if you can get any information in that manner.
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