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Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 33730
Experience:  15 years real estate, Realtor. Landlord 26 years
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I have a second mortgage I took out in 1999. The mortgage

Customer Question

I have a second mortgage I took out in 1999. The mortgage was a private mortgage held by a couple who were later indicted and served prison time. When I read they were criminals I stopped paying on the $44000 second mortgage in June 2004. They demanded payment shortly after but never foreclosed. I have never paid a cent to that mortgage in 12 years. I pay my first mortgage as scheduled. I got a visit from the IRS in 2012 asking me about the couple and how I got the mortgage. They said they now own the mortgage after they got convicted and went to jail. They said they would call me and work out some kind of settlement arrangement and as of today four years later I have never heard back from them about the matter. My question is can I get a quiet title to extinguish the lien? I would like to refinance my first mortgage and also want to be free of this. I believe the statue limitations has run for foreclosing and I feel the mortgage was fraudulent to begin with as they used the money they stole for the mortgages. What can I do?
Submitted: 8 months ago.
Category: Real Estate Law
Expert:  Barrister replied 8 months ago.

Hello and welcome! My name is ***** ***** I am a licensed attorney who will try my very best to help with your situation or get you to someone who can. There may be a slight delay in my responses as I research statutes or ordinances and type out an answer or reply, but rest assured, I am working on your question.

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Can you tell me how long the mortgage was supposed to run? (i.e. ten year, 20 year, 30 year?)

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thanks

Barrister

Customer: replied 8 months ago.
30
Expert:  Barrister replied 8 months ago.

Ok, there are two different statutes of limitation with mortgages, one for personal liability, and one for the actual Note with the mortgage.

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The personal liability statute of limitations for a breach of contract action is only 4 years in PA. So that has long since passed and you can't be held personally liable for the debt any longer.

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However, with a mortgage and Note, the Note comes due at the end of the mortgage term. If it is unpaid when due, then that is what starts the statute of limitations for a breach of contract action there. So if this was a 30 year term loan and Note, it becomes due in 2029 and would become unenforceable 4 years after that. What this means is that whoever owns the Note can choose to foreclose on the property until 2033 if it remains unpaid because the property was pledged as collateral for the loan.

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So I am afraid that a quiet title action wouldn't help you here because if the IRS owns the debt now, they have a very long time to foreclose on it. They can't hold you personally liable, but they could foreclose on the property if there was enough equity in it to justify them doing so.

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I am very sorry that I don’t have better news, but please understand that I do have an ethical and professional obligation to provide customers with legally correct answers based on my knowledge and experience, even when I know the answer doesn’t make the customer happy...

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thanks

Barrister

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