So I've read through a great deal of posts in the "Strategy for Settling Your 2nd" thread but I'm still a little confused and I was hoping someone could tell me what was going on.
I stopped paying my first and 2nd mortgages on my condo in November 2011. I was able to get through the short sale process, found a seller, and we closed on the home on 4/2/2012. So overall it was about 5 months.
The 1st was for about 350,000 and the second was for about 50,000. Both were from Wells Fargo and both loans were used to purchase the home in Virginia (where I'm located).
Anyway, I received a letter a few weeks ago (about a month after settlement) saying the 2nd loan has been charged off due to delinquency and the entire balance has been accelerated and is now due and owing.
I don't understand what just happened. How could they say I'm delinquent on a loan a month after I've sold the home? I understand you have to be 180+ days delinquent and I wasn't. I was less than 149 days (less than 5 months). The 2nd accepted a payment of 10%; from the 1st to remove the lien on the home.
I don't believe the loan has been sold to a collections agency yet, the letter I received was from Wells Fargo. I understand HELOC loans are non-recourse but what I don't understand is whether I will get a 1099 for this loan at the end of the year AND have to repay it. Is this what happens? If I get a 1099 does that mean I pay taxes and it's all done?
What should I do?