Question: I live in Idaho. If my home goes into foreclosure what happens to my Home Equity Line of Credit that is attached to the value of the property?
Answer: -Your home equity line of credit (HELOC) gets wiped out if no one bids. Then, typically your 2nd lien holder will 1099 you or file for a deficiency judgment. It’s more common to receive a 1099.
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The sequence of presentation is excellent. It is so easy to follow and you
also give such great ideas for creativity and how important timing can be.
I am in the mortgage business but I never had any idea on how to
purchase a foreclosure. This is really the only manual you will ever need.
J. Bekolay, MI
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March 11th, 2009 at 10:51 am
Does this apply to all states? I live in Wisconsin and am going through deed-in-lieu of foreclosure but I can’t seem to get any answers from Wells Fargo as to what will happen with my line of credit.
April 16th, 2009 at 5:05 pm
Yes, typically with a deed-in-lieu foreclosure, you are still obligated to junior lien holders. Meaning in order for you to “give them the deed” you have to pay off or satisfy the junior lien holders as well. Deed-in-lieu foreclosure works well when you only have a 1st mortgage. But yes something will happen to it, either get written off or they’ll file a judgment.