Find the best financial services for you at: SMARTFINANCESOLUTIONS.NET - If I settle with a mortgage company, what percentage of the full amount should I try not to go over? - First mortgage foreclosed on the house but still 95K short after it was auctioned. Already received the 1099 so I have to pay taxes on that. Now the second mortgage is still looking for their 110K and threatening to garnish wages and apply liens unless I settle. Being that I no longer have the first mortgage, bankruptcy court says my income is too high to discharge the second.