Home Loan With An Outstanding Charged Off 2nd Lien

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,100
181
63
San Diego, California
www.loansreduced.com
With LoanSafe being one of the leading websites in the industry in regards to educating borrowers whether it be for loan modification, second mortgage settlement or new home loans after foreclosure this has been a topic of discussion for some time.

How to get a home loan with an outstanding charged off lien still reporting on credit?

Up until recently I would have told you that you have to wait the Fannie Mae/Freddie Mac/FHA seasoning periods before being eligible for financing as an active derogatory mortgage would affect your ability to get a new home loan.

A solution has finally come that will allow you to bridge the gap of being Conventional or Government eligible!

Normal waiting periods are as follows:
Fannie Mae/Freddie Mac - 4 years after lien was charged off, 2 years with extenuating circumstances.
FHA - 3 years after lien was charged off, 12 with extenuating circumstances.

Now most people in this situation do not qualify for extenuating circumstances however if you do fit that box feel free to give me a call and ask.

Portfolio Program For Charged off Lien:
If aggregate balance of charged off lien is less than 25,000.00 you would be in Tier 1 pricing (better)
If aggregate balance is over 25,000.00 - pushed into tier 2 (worse than Tier 1)

The lien must not be affecting title, meaning if you have a property currently with a charged off lien, that cannot be refinance. The reason for this is because the 2nd lien will not subordinate and any lender isn't going to allow a 2nd mortgage to be in front of them.

With this program you must no longer retain ownership interest in the property with the charged off 2nd lien.

To apply online go here: www.loansreduced.com - e-mail: [email protected] PH: 800-779-4547
 

Dailydriven911

LoanSafe Member
Nov 20, 2017
4
0
1
Hello! What if you go through a foreclosure on a property with the 1st mortgage and the 2nd (SLS) does not get foreclosed on? This was back in 2014 with our first house bought in 2005. Both the 1st and 2nd sent me 1099A tax forms. Does that mean I'm off the hook? The 2nd still sends me monthly statements here and there and a couple settlement offers but I ignore them. Just last few weeks started getting calls after a couple years of nothing. I'm in WA state. Any help is appreciated. Thanks!

Fyi we have don't have any interest in this property and it has since been bought and sold 2x in last 3 years. We bought our current home in 2012 before our credit took a hit and live here now.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,100
181
63
San Diego, California
www.loansreduced.com
Hello! What if you go through a foreclosure on a property with the 1st mortgage and the 2nd (SLS) does not get foreclosed on? This was back in 2014 with our first house bought in 2005. Both the 1st and 2nd sent me 1099A tax forms. Does that mean I'm off the hook? The 2nd still sends me monthly statements here and there and a couple settlement offers but I ignore them. Just last few weeks started getting calls after a couple years of nothing. I'm in WA state. Any help is appreciated. Thanks!

Fyi we have don't have any interest in this property and it has since been bought and sold 2x in last 3 years. We bought our current home in 2012 before our credit took a hit and live here now.
Hi Daily Driven,
If the property foreclosed that had a 2nd mortgage that was charged off as long as you meet the timeframe needed for charged off liens you should be fine as the 2nd is no longer a lien against real property.

When did the 2nd charge off?
Washington is a non-recourse state meaning they can't come back after you for a deficiency owed on the property (please discuss with a real estate attorney to be certain).

If you're looking to purchase a new home, the first step would be to run your file through the automated underwriting system. Please let me know if you would like to do that anytime and I would be happy to help.