Make payments on a debt about to be settled?
December 19, 2012 11:57 AM Subscribe
make payments on 2nd mortgage about to be settled in short sale?
posted by morganw to Work & Money (2 answers total)
I haven't made a payment on my 1st or 2nd since September. I'm about to close (hoping by the 31st for taxes, but more likely by Jan 9) selling the marital home (divorced in 2012) in a short sale. The payments on the 2nd are interest only and about 1/20th of those for the 1st.
I got a call from the bank holding the second this morning warning me the missed payment from Sept 25 will be reported as 90 days late on Dec 25. I don't care much about my creditworthiness, but my ex might want to get a car loan in a few years. Won't the two settled (charge off?) debts affect credit a lot more than some late payments?
There's also the possibility that suddenly being "able" to make payments will change the bank's mind about accepting a short sale. Is that a realistic worry? [2nd holders get a much smaller % of what they're owed- the 1st is getting over 90%.]
The deed and both mortgages are in both names (me & ex). I was supposed to "assume" the loan, but it turns out the bank holding the 2nd doesn't allow that