2nd mortgage is lost - it's on title, but seems no one is servicing it so we can't work it

Long story, so I'll be concise as possible... Started with Bank of America - they serviced the 1st and 2nd mortgages. We got both approved and buyer walked. Round 2... Start working a new offer, Bank of America says I need to work the 2nd independently. I tell them they are the servicer, and they tell me they're not. At approval time for the 1st, BoA's negotiator is urgently telling me that there is a 2nd mortgage. I let her know that Bank of America services it, and show her the approval letter from last time. She is relieved, does her thing, and we're approved. Buyer 2 walks...

Same process began again, but during our 3rd attempt BoA sold the 1st to Resurgent. Now no one is claiming the 2nd. Resurgent says they don't have it, BoA says they don't have it, and the investor for both loans on the title search is Bank of NY Mellon - they say they don't have any information on the 2nd.

So basically, since we can't find the 2nd, we're dead in the water until we do. Seller has called the foreclosure attorneys representing Bank of NY Mellon multiple times but only gets voice mail and no response. I've asked multiple title agents, one even went to the courthouse but everything there was outdated.

Has anyone run into this? I'm at a loss on how to try to track this 2nd loan servicer down.

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Permalink Reply by Simon Campbell on April 15, 2013 at 1:21am

The Seller should have received some sort of correspondence from the 2nd.  Especially would this be so if they have defaulted on the payments for this loan. Hopefully they have kept the letters and notices.  In those, there must be an address or some additional phone numbers that can assist you to make contact.

Permalink Reply by Eugene Mills on April 15, 2013 at 2:29am

Thanks Simon. Seller swears he hasn't gotten any paperwork from anyone regarding a 2nd loan since back when the loans were with BoA. I believe him because when the 1st got transferred to Resurgent he let me know very quickly that he got a letter from a new lender.

I think where this got weird was the seller's bankruptcy a couple years ago. He was under the impression the 2nd was gone, and swears he hasn't gotten any paperwork about a 2nd since. All his paperwork from then on just had the loan number for the 1st, so he assumed the bankruptcy wiped out the 2nd or it was consolidated in with the 1st. Yet we all know it's there. For now I'll ask him to keep trying the attorney for Bank of NY Mellon.

Thanks for your response Simon, much appreciated.

Permalink Reply by Kevin - Greenville, SC on April 15, 2013 at 4:36am
Permalink Reply by Carol Pease on April 19, 2013 at 2:00am

Hi Eugene:

I had a very similar problem that took 13 months to close.  BOA held 1st and 2nd.  Seller filed Chapter 13 and was at end of 5 year period when short sale was started.  Supposedly loan was bought transferred to Recontrust.  Started short sale and BOA wanted court order allowing for the sale.  BOA claimed that the 2nd was sold but would only provide that information to seller directly.  My seller spent 5 hours one day in BOA hell trying to get information.  Short sale was restarted over and over and each time rejected because of bankruptcy even though we had a court order.  Twitter team at @BofA_help got involved and helped facilitate.  Recontrust  provided the information that BOA had actually forgiven the 2nd debt in 2008 but had never completed the paperwork nor had they "officially" notified the seller in writing.   In the end their paperwork had to be completed,  the two loans had to be linked together (a process that took almost 2 months) before we could have resolution.  We were in "closing" in Equator for almost 2 months.  Even though the 2nd was forgiven,  they still got $2,000 at closing.  Try the  BOA twitter team.    I used them extensively  and each time they got involved we got over a procedural hump.  They provided the forward momentum that eventually resulted in a closed transaction.  They key to the whole thing was the linkage of the two loans.  I hope this helps.

Permalink Reply by Eugene Mills on April 19, 2013 at 9:13am

Thank you all for the responses. I had no idea what a great resource this site is for helpful information. Very high quality responses. At this point, I'm trying to get Resurgent to communicate with Bank of NY Mellon. I'm thinking Resurgent (new owner of the 1st) might be the only entity that can get Bank of New York Mellon to check into it.

I do think where things got funny with BoA was that there was a bankruptcy. I'll backtrack to BoA just in case - it does seem like the 2nd went away as part of the bankruptcy, or was consolidated into the 1st, something along those lines, but title was never cleared of it. Way back when we 1st had an approval we were asking BoA for a letter indicating that 2nd was satisfied, but to no avail.

Thanks again for all the help - I think I'll be visiting this forum more often!

Permalink Reply by Simon Campbell on April 24, 2013 at 1:31am

I agree with some of the other comments here. The answer no doubt lies in the bankruptcy documents. If it can be clearly proven that the second was eliminated in the bankruptcy, then that should be enough to file for a quiet title. In these documents, there should also be contact information on the second.  I believe that is the place to start digging. Good luck!

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