Hel Not On Credit Report

bucktail

LoanSafe Member
Dec 12, 2017
2
0
1
So 13 years ago i took out a HEL (not line of credit. probably recorded as second mortgage) to start a business. During the market crash of 2008, my business suffered significantly and I stopped paying on the loan. Subsequently, the bank went bankrupt and i lost track of that second mortgage. A few years ago I started getting letters from the collection agency that apparently bought the debt. i say apparently because they've never given any proof that they acquired it. It does not show up on my credit report and I have no intention on paying it until they prove they own it. However, the lien still shows against my primary residence.

Now, i'm looking at buying some investment property. My credit score is very good (720-760), my DTI is super low (25% or less) and we have more than 120% DCR on the new property purchasing with 25% down. My questions is whether this issue is going to prevent me from getting the mortgage on the investment property?

Thanks for any and all suggestions and help.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,099
181
63
San Diego, California
www.loansreduced.com
Do you happen to know if the lien was charged off? If it's charged off do you know when that occurred?
 

bucktail

LoanSafe Member
Dec 12, 2017
2
0
1
I believe it was charged off in 2008 or 2009.

After a little more investigation, I have learned that the assets of the bank were purchased by BMO. But I've never heard a word from them directly. The company that occasionally sends me collection letters I believe is the PMI company. (Old Republic) I'm starting to think i should try to get the lien released by BMO as many others have. But I don't want to open Pandora's box. Especially until my investment property closes.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,099
181
63
San Diego, California
www.loansreduced.com
That might not be a bad idea, we have had members here that were able to accomplish getting the lien release that have actually funded. I have also had members where the lien was not released preventing our ability to get them a new loan.

But you're right, I would wait on the investment property to close before taking any action regarding the lien.