Second Mortgage for Purchase Money (80/20) in a Non Recourse State

[helpmeplese]

My question involves a mortgage in the state of: Minnesota

2 part question:

1) I bought a house in 2005 and foreclosed a year later. The mortgage was an 80/20. After the foreclosure, the first mortgage (80) was closed and the second mortgage (20) is apparently still open and trying to collect. Since MN is a non recourse state and the 2nd mortgage was a purchase money loan secured by the first mortgage, should this remain open?

2) If it is indeed a valid debt thats owed, the debt started in April 2006. It has been 6 years+. The Statute of Limitations in MN is 6 years if I'm not mistaken. How can I make any collection attempts stop and remove this from my credit report?


I tried searching for similar topics but came up empty. Sorry if its a duplicate, and thanks for any help in advance.

[Mr. Knowitall]

Your second mortgage holder may sue you for a deficiency after a non-judicial foreclosure by the primary lender.

I'm not sure what you are intending to say with, "the 2nd mortgage was a purchase money loan secured by the first mortgage", as the mortgages are secured by the real estate, not by each other.

The second mortgage lender has six years after the deficiency sale to decide whether or not to sue to try to recover the money you owe. You cannot stop collection efforts while the debt remains valid.

If they sue and get a judgment, that will be new activity on your credit report. If they do not, their collection should drop off your credit report seven years after the date of last activity, which presumably would be the foreclosure but is something you should be able to determine from the information on your credit report.

[helpmeplese]

Mr. knowitall, thank you for your reply. My follow up question for you would be since you stated both mortgages would be secured by the property, both debts should be closed by the foreclosure, right? Again with MN being a non recourse state, once the foreclosed property is sold, the borrower is not responsible for any deficientcy as long as the loans were for purchase money of the property.

Am I wrong with any of this info?