When I bought my home back in 2007, it was a 80/20 loan. The bank foreclosed on the first mortgage (30 years) when the adjustable interest rate jumped to 14% and I did a strategic default to try to get them to renegotiate my rate. Three foreclosure dismissals later, the 1st mortgage situation is at a standstill. However, that 2nd loan (15 years), in which a payment was never made (ever), is now approaching 8 years. The bank never attempted to foreclose on it so I never received an acceleration letter. Does the FL SOL apply now, or do I have to wait until 5 years after its maturity for it to become void?
The answer to your question can be many. THe mortgage could be written off or charged off as bad debt but still against title as a lien against the property if the lender discharged tbe debt but didn't prepare and record a satisfaction of mortgage. Or they could be waiting for the first to foreclose in order to see if they get any surplus. There are so many different scenarios. Lay low and allow the first to foreclose or settle with you and tnen revive the second.
I agree with the previous great answer. This is an "it depends" situation. If the second is just waiting for the first you will find out when that case finishes or is dismissed. In that time you should find out if the second is legal and proper, or is somehow unenforceable ( statute of limitations, statutory protections, improper documentation, waiver or some other reason). There are so many ways this can go. It would be a good time to really work with an attorney who has experience with foreclosures and can address your specific situation. Use the find a lawyer tab above and talk with a few lawyers about the case.
Good Luck
Both mortgages likely remain valid liens against the property. Whether one or the other remains an enforceable debt depends: the statute of limitations depends on many factors not identifiable from your question. The general rule is that the statute of limitations does not begin to run until the debt has matured (become fully payable). The debt may not mature for several more years. Or the terms of the loan may permit the debt to be accelerated upon default. If a debt is accelerated it becomes fully payable so that the statute of limitations starts to run. Some loans state that acceleration is automatic; some say acceleration occurs upon notice. Whether your debt has been accelerated is a question of fact that may largely depend on facts solely in the possession of the lender.
My colleagues that say "it depends" are correct. The one thing that seems sure is that the SOL would apply to any installment payments due more than five years ago assuming that the SOL is properly pleaded once a case is filed.
Your best bet is to "lie low" and wait it out. Few investors throw money at foreclosing a second mortgage when the first remains as a lien on the property.
