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Samuel-II, Lawyer
Category: Real Estate Law
Satisfied Customers: 27009
Experience:  real estate law
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I have a second loan on my home that from a private lender.

Customer Question

I have a second loan on my home that from a private lender. I have not paid on the loan in 6 years. Can the lender foreclose on my home, as I worry when it finally gains equity again, this may be their plan. Also, am I able to legally remove their lien on the property if the statute of limitations has ran out for collecting the debt?
Submitted: 4 months ago.
Category: Real Estate Law
Expert:  Samuel-II replied 4 months ago.


This is Samuel. Yes, a second mortgage holder can foreclose, even if you are current on your first mortgage. Just like any type of loan, if you are behind on your payments, the lender has the legal right to take whatever property was offered as collateral on the loan. In the case of a second mortgage, that means they have the right to foreclose on the house and sell it to recoup their losses.

I am unclear on the second part of your question. Would you rephrase it for me, please. Thank you

Expert:  Samuel-II replied 4 months ago.

Are you asking since you haven't paid them can you dissolve the loan and thus remove the lien? That answer is no. The loan will be in effect and attached to your property until paid. If you sell the property, the second lender will need to be paid for a clear title to pass.

Expert:  Samuel-II replied 4 months ago.

Please let me know here if you have other questions or need clarification. Otherwise a Positive rating ensures i get credit for my time.

Customer: replied 4 months ago.
I have read that there is a 4 year statute of limitations on foreclosure in California. Is that incorrect? It seems that you are saying that though my second lender has not collected on the debt in six years, they can at anytime foreclose?
Expert:  Samuel-II replied 4 months ago.

Thank you for the clarification of the second part of your question. You are correct. They cannot file a foreclosure. However, the lien stays against the property that was put up as "collateral" for the loan, which by the way has interest compounding on the balance as per whatever your loan agreement is. Therefore, even though they are time barred from foreclosing the lien will still need to be paid off before you get any proceeds from your home if and when it is sold.

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