Q: I had a foreclosure on a house that had the two mortgages both based on good credit, market went upside down, so we
foreclosed. Property was sold at auction by Citibank, the 1st mortgage holder, then sold on the market. This first mortgage was not forgiven, 2nd mortgage was. i pulled a credit report and now I find the 1st mortgage original outstanding balance on all three credit reports held now by NationStar as bank owned when this bank did not own the property. I looked at the court docs and Citibank bought it at auction. Prior to the foreclosure i was sent an offer through the mail by Nationstar bank they were offering a deed in lieu to avoid the forclosure. I called just to find out about this because I didn't know what it was and I never agreed or signed anything and next thing i knew, a bill for the outstanding mortgage amount came in the mail.....I thought this was just ridiculous and just ignored it not realizing that this Nationstar Bank out of Texas, now put this outstanding mortgage amount on my credit report stopping me from an FHA 3 year 1st time home buyer program. Is this legal?
A:
The Nationstar issue may have to do with the 2nd, not the first, mortgage.
The first mortgage after foreclosure had one year to get a money judgment on any deficiency from the judgment to the value of the home at time of the foreclosure sale.
Maybe the second mortgage was not forgiven, as you believe. Just because they wrote off the loan does not mean the note and mortgage went away. If you did not get a release of mortgage, then it is still there and here is your problem (most likely).
An attorney can probably track what happened.
As an aside - how are you a first time homebuyer?
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