2nd Mtg Holder defendant in foreclosure?

[boomersmom]

I live in Ohio.

In 2001, I sold my home. The buyer couldn't afford to finance the entire purchase price and had no money for a downpayment, so I wrote a second mortgage to get her LTV down to 80% and she was able to obtain conventional financing for the remainder of the purchase price. This person was a "friend" - later the friendship dissolved, and I never received a penny toward the 2nd mortgage. I've written off the debt as a lesson learned.

At any rate, this person has now apparently defaulted on her 1st mortgage and that loan is being foreclosed. In the court records, three defendants are named: the buyer, "unknown husband john doe" (she isn't married), and myself.

I don't understand how this works. For what reason would the 2nd mortgage holder be listed as a defendant in the foreclosure?

Additional information: I recently filed bankruptcy, and part of the information the court collects regards any debts owed to me. Obviously, this mortgage qualifies. I only mention it because I'm not sure whether this could potentially be related.

Thanks,

Boomer's Mom

 

[HomeGuru]

I live in Ohio.

In 2001, I sold my home. The buyer couldn't afford to finance the entire purchase price and had no money for a downpayment, so I wrote a second mortgage to get her LTV down to 80% and she was able to obtain conventional financing for the remainder of the purchase price. This person was a "friend" - later the friendship dissolved, and I never received a penny toward the 2nd mortgage. I've written off the debt as a lesson learned.

At any rate, this person has now apparently defaulted on her 1st mortgage and that loan is being foreclosed. In the court records, three defendants are named: the buyer, "unknown husband john doe" (she isn't married), and myself.

I don't understand how this works. For what reason would the 2nd mortgage holder be listed as a defendant in the foreclosure?

**A: and when you called the first mortgage lender's attorney and asked, what did he/she tell you?
********

Additional information: I recently filed bankruptcy, and part of the information the court collects regards any debts owed to me. Obviously, this mortgage qualifies. I only mention it because I'm not sure whether this could potentially be related.

Thanks,

Boomer's Mom

**A: it is related.

 

[boomersmom]

HomeGuru:

Thanks for your reply.

I haven't yet contacted the attorney for the 1st Mortgage holder (I found out about the foreclosure action over the weekend). Also, I wanted to speak to my bankruptcy attorney first...I have a call into her but haven't yet received a reply. I was hoping to be able to get some useful information here before I contacted either attorney.

I'm still trying to figure out how they see me as liable for her mortgage.

I appreciate your response.

Boomer's Mom

 

[MortgageGuru]

You are being shown as a defendant because you stand to lose your investment. Even if it was a mechanics lien in the first lienholder position and the mechanic foreclosed then you would still be out unless you paid them off.

 

[boomersmom]

Thanks, MortgageGuru, for your response.

My bankruptcy attny clarified when I was able to speak with her.

I'm preparing an answer letter stating that I wish to preserve my claim and (hopefully) recover anything left from the proceeds of the sale.

Thanks again,

Boomer's Mom