Massachusetts Consumer Legal Questions

Your question sure raises a lot of questions with me! Are you sure that the second mortgage holder agreed not to pursue collection? If that is the case, then it could not assign or sell a non-existent/cancelled debt.  Thus, United Guaranty should back off when you produce documentation that the debt was cancelled. If not, then be sure to challenge wrongful reporting on your credit report, and you will have a defense to payment in response to a collection suit.  Check out www.ftc.gov to learn more. It might be that the second mortgage holder only agreed to release your home from its security interest and agreed not to foreclose. That could happen without any release of your duty to pay. If that's what happened, then you still owe the amount of the second and are bound to pay. It's just unsecured. It also means that your credit could still be damaged. If the debt was, in fact, cancelled, and you were damaged because of the lender's failure, then you could find a lawyer and sue. I'm not sure of the amount of your damages, but if small enough, you could bring your claim in small claims/magistrate's court. It seems that you would sue United Guaranty and the initial lender.  You will need to be sure you have evidence that the loan was satisfied in order to make your case. They could still argue that you failed to mitigate your damages by not otherwise challenging their collection. If successful, this would impact the amount of your recovery. I'm a lover not a fighter, so I suggest that you make every effort to work it out OUT of court. If you can demonstrate that the debt was released, also demonstrate the amount you'll pay over the life of your car loan at the higher rate and see what you can do. Keep in mind that even being set free of the second mortgage could have impacted your credit.  Best of luck in getting your ducks in a row and your credit on track.... Read Answer