Years after loan default, homeowners may still owe - Sacramento Bee

Don't let this happen to you:  The downturn forces you to do a short sale, relieving your first mortgage debt.  But the second mortgage isn't officially forgiven, and later comes back to bite you.  Quoting from the Sacramento Bee,

"In many short sales, experienced real estate agents or attorneys can negotiate away debt obligations for the second-lien loan. But many inexperienced borrowers don't know that, and sign final-hour agreements giving lenders the right to pursue them later."

If you're involved in a distress sale from either side of the transaction, an experienced advisor is crucial. - David