Capital One 2nd Charge Off
One of my borrowers had a 2nd mortgage through Capital One that was given to them and listed as a credit card. That acct. was charged off, and another company bought the debt. With Cap One charging off the debt, the lien is voided now correct? The acct was $5,000 hence a charge off instead of a foreclosure.
No mortgage would automaticly be voided. (unless specified in the mortgage)You'll need to get a satisfaction or cancellation of mortgage/lien from whomever holds it now. If they consider it satisfied then they might just send it to you, but they probably don't consider it paid from what it sounds. In which case you will need to get a payoff and pay it prior to or at closing to ensure the new lender is in first position. If someone else bought this debt at pennies on the dollar you may be able to get a settlment for less than the actual payoff, but since it is secured debt the chances of that are not great.
Notes: Capital One may have charged it off as a loss and sold/assigned it to someone else, but I've never seen that to void a debt, the new Co. will want to collect as much as they can.
Notes: It may have been a revolving CC, but if it was secured by the house then it's a mortgage for sure-- sounds like a HELOC to me.
Bottom Line, If you want to get a loan done for this borrower then get a payoff and try to negotiate it down as much as possible. Tell them if they'll take a $1000 then you can get 'um paid and do the loan if not it's dead-- maybe they'll think thats better than nothing-- it never hurts to ask..
Sorry this was so long, but I hope it helped--just my opinion
Best of Luck