We are co-guarantors of a construction loan for a builder. The property is in the builders company name. We just found out the builder took out a second mortgage on the home. The bank holding the construction loan would not refi and wanted the note paid in full. Now the bank has a judgement against us to repay the loan. Builder is willing to give us a quit claim deed on property,but if we sell at fair market value me might be in the hole if we have to pay back both mortgages. Can the builder legally take out a 2nd mortgage without us knowing? Is this mortgage fraud?

This is a legal question you would want to discuss with your attorney. One question I would ask if whether you had a written agreement with the builder concerning additional debt for his company or this property specifically.

I AM GOING THRU A NIGHTMARE, BANK SENT LOAN TO A COLLECTION CO. PREMATURELE, THEY FORGOT 1/2 OF IT WAS BACKED BY CD AND LOAN NOT DUE FOR ANOTHER 5 YRS. SEIZED MY CD, THEIR COLLECTION AGENT THAT I WOULD NOT AUYHORIZE CREATED A CHECK TO MY ACCOUNT AND FORGED IT. BANK STATED COLLECTION AGENCY WAS A PART OF THEM, IT WAS ALSO A LIE. COLLECTION AGENCY WOULD PAY 50% OF COLLECTION, YET WHEN I TOLD BANK AND REMINDED THEM I HAD A CD, UPON SEIZING IT IT PAID THE 50% OF COLLECTORS, YET THE BANK 'BACK DATED IT' THE BANK ALLOWED FORGERIES, LIED OF COLLECTOR BEING PART OF THEIR BANK, AND ILLEGAL PREMATURE SEIZURE AND SENDING A LOAN PREMATURELY TO COLLECTOR. ALSO WHEN I TRIED TO RE-FI HOME,APRIL 2008, BANK STATED I OWED THE CD AMOUNT AND I COULD NOT RE-FI FOR IT WAS TOO HIGH. BANK NEVER ONCE SENT ME NOTIFICATION OF MY CD SINCE 2001, IF I DID NOT ACCIDENTLY FIND IT, THEY WOULD HAVE NOT. NOW THEY HAVE ME TALKING TO THEIR ATTORNEY AND I'M INCORRECT....I DON'T THINK I AM. I TOLD THEM TO REMOVE THE LIEN OFF MY HOME OR I WILL SUE, THEY DON'T CARE EITHER....HELP, I KNOW THEY ARE NOT APPROPRIATE THEY HAVE FINANCIALLY HURT ME ALSO.....

Some web etiquette first.

1. Start a new thread as your post differs from the above completely.
2. Typing in caps is the equivalent of shouting. It is also hard to read.
3. You don't have a question. But if the bank has counsel involved, we recommend you employ counsel. There is obviously a lot of mis-communication and the transactions don't seem to have been understood by all parties.

Since there is counsel involved, we can't opine.