loan forgiveness

When a house mortgage is forgiven and so many years later the owners of the house want to sale the house is the title cleared for them to do so?

parenthelp

How was the mortgage forgiven? Details needed.

lex

filed for bankruptcy but they (the loan company) decided to just forgive the loan.

parenthelp

In a bankruptcy proceeding a loan is not usually "forgiven", it may be abandoned by the mortgagee because it is not worth pursuing. At that point, the property may become an asset of the estate and subject to whatever the bankruptcy trustee wants to do with it. Was there a discharge that left the bankrupt "in possession" of the house?

You really need to examine the bankruptcy discharge order, that is what a title examiner will do.

lex

the first mortgage was done as a re-afirmation. (Not sure of spelling. sorry). The bankruptcy judgement was over a year ago.

parenthelp

A re-affirmation is not remotely a forgiveness. It is simply an agreement that the debtor will continue owing the debt but keep the asset that is mortgaged. Payments on the mortgage would have to resume. Assuming the arrangement worked out, the title to the house should not have changed. It would not have been "cleared" in the bankruptcy, it would have been more like ignored since the trustee would have abandoned the property and the creditor agreed to not then continue to foreclosure since the debtor agreed to re-affirm the debt.

lex

I understand that part. Reaffirmation thing. But that was the first mortgage on the home. The second mortgage was said to be forgiven. Their was a second mortgage on the home for less than 1/4 of worth of home. When the first one was reaffirmed but the second one wasn/t what happened to the bank's part of the second mortgage?

parenthelp

As a second mortgage, it may have been discharged if the creditor did not bother to enforce it's claim. That can happen if the creditor does not see enough equity to be worth the trouble. You would have to look at the record to know for sure. There would be too much guesswork to say what the status of the title to the home is without knowing exactly what happened in the bankruptcy proceeding.

lex

thanks! Where would I go for this info? at the parish courthouse under title search?

parenthelp

Clerk of Bankruptcy Court for the federal district where the bankruptcy was filed.

lex