Will my second mortgage be forgiven?


A second mortgage or home equity line of credit is negotiated to be settled during the short sale process, so any debt from these would be forgiven. California law SB 458 benefits homeowners who wish to pursue a short sale and have a second mortgage or home equity line of credit. With a foreclosure, California law allows lenders to attempt collection or freezing of assets for the amount of debt from a second mortgage or home equity line of credit. When a homeowner completes a short sale, all second mortgage or home equity line of credit debt is considered forgiven, which means the lender cannot pursue you for any unpaid debt.