Posts Tagged ‘home equity line of credit’

Question:  I have a house that is currently going through the short-sell process. I have an approval letter for the first and the second. The second is stating “BAC Home Loans Servicing, LP and/or its investors may pursue a deficiency judgment for the difference in the payment received and the total balance due, unless agreed otherwise or prohibited by law, if the short sale closes on the loan referenced above.” I live in CA and the second was an home equity line of credit (HELOC). We have already agreed to pay $2500 to the second and they have agreed, but they are still including this language in the short sale approval letter. What rights do they have to sue us later on?

Answer:  - It depends on what you agree to as part of the payoff. This is where you need to make sure you ADD to the payoff letter that the $2500 is for “full satisfaction” of the loan. See there are 2 types of payoffs. 1 is a “release of lien” which means you pay the mortgage company $2500 and they retain the right to still come after you for the deficient amount. The other payoff is a “satisfaction” which means “paid in full” – they give up their right to come after you for the deficient amount (which is called a deficiency judgment). All they can do is 1099 you for the amount lost of which you can file form 982 and in most cases claim insolvency and negate the 1099. If it was your personal residence, with Obama’s new laws in place, you may not have to pay anyway. So whatever you do, please please please get the satisfaction. Sometimes if they don’t agree to a satisfaction of loan, you’ll just have to pay a little extra more to get that piece of mind.

Question: I have a mortgage and home equity line of credit on the same property with Countrywide. I am in Florida. If my property is foreclosed upon what happens to the home equity line of credit? Also am I held liable for taxes up to the foreclosed date?
Thanks

Answer: -If your home has a first and second with the same lender, Countrywide, it’s almost treated like it’s one loan.  If they send it through foreclosure, they’ll probably start at just what’s owed on the first and hopefully get someone to bid on it…If no one bids then they’ll end up with the property.  Then they’ll probably write off that 2nd in which they could file for a deficiency judgment but more than likely they will 1099 you for that amount they lost and you’ll have to pay taxes on it.  As for the property taxes, they’ll have to pay those in order to sell it to an end buyer.

Question: I own a home in Florida. We owned the home outright and then got a home equity line of credit. We have not made a payment in 2 years!! I heard they can not evict. Is this true? I call and email them all the time and they never respond.

Answer: -You haven’t made a payment in two years and you own the home outright beside a small line of credit…You are crazy for not making that payment unless the home is not worth what you owe on the home equity line of credit.  No they can’t evict you…yet!  Once they foreclose on the property they can evict you.  I would try to get something worked out quickly especially if you have a great deal of equity in your home.

Question: I have a home equity line of credit on my home in florida that I owe about $75,000 on. I owe about the same on my 1st mortgage that is with the same lender. If I can’t afford to make the payments on the line of credit but continue to make my 1st mortgage payments can the lender foreclose on my home?

Answer: –  Yes, the 2nd can and most likely will foreclosure on your home, even if it’s the same lender because you are not meeting your obligation to them.  It’s just a matter of time. You might try to do a Loan Modification especially if your 1st and 2nd mortgages are with the same lender

Question: I own a home in Southern California. I bought the home using my VA benefits. I am 3 months behind in my mortgage. It doesn’t look like the mortgage co. (Countrywide) is going to modify the loan so that I may keep it, already contacted HUD and they sent a modification proposal to Countrywide 30 days ago but Countrywide has yet to receive it. My question is, I owe $64,000 on a Home Equity Line of Credit I got through Washington Mutual Bank on the house. If Countrywide forecloses, do I still owe the Equity Line of Credit? Will Washington Mutual come after me for the money? I owe $220,000 on the house, it was just appraised at $175,000. Thank you.

Answer: –  California may be one of the few states where they don’t come after you for a deficiency judgment.  If your home is foreclosed on, typically they will 1099 the borrower for the amount they lost. However, VA loans have special exceptions. With VA loans, I believe they may have the right to come after you for the deficiency judgment. You may want to check with an attorney in California on this, but it seems like that’s what I remember.