What Defaulting On Your Loan May Mean To You

Homeowners defaulting on mortgages today may be surprised to learn years from now that a collection agency is coming after them.

Why would that be? It is because lenders have been selling second mortgages and home equity lines left unpaid, after foreclosures and short sales to collection agencies, that in some states have years to make a claim. Obtaining a judgement against you they have years to pursue borrowers with repayment plans, and even garnish your wages.

Most people are stressed out as they try to save their homes and are not aware they could face another problem later on. That is why it is of paramount importance that you obtained the necessary advice to prevent future problems comming your way. Consult a professional.

A new short sale program is dealing with preventing banks that hold second-lien loans from pursuing collections from homeowners after the short sale. This program goes into effect April 5, 2010. In this program Sellers will receive notice that their servicer has steered part of the sales proceeds to secondary lien holders "in exchange for release and full satisfaction of their lines". This release would apply only to short slaes done through the administration's Home Affordable Foreclosure Alternatives program.