Foreclosure University

Your Online Real Estate Investing Resource

Jarad

Can I Short Sale My HELOC?

by 3 Comments

Question:  I may need to short sale my home in Washington DC. My second is a line of credit of $80K. Is it possible that that lender approve a short sale, or will they automatically not, just because it is a line of credit and not a regular mortgage loan?

 

Answer:  

Yes, you can “work out” something with your lender. A short sale is usually done when you have a buyer come in and offer the bank less than what that home is worth and then you have to move out. If you want to sell the home, than that would be an option. However, a better alternative might be to Settle Your 2nd Mortgage. This is where you would negotiate a full payoff or settlement of your 2nd mortgage. It’s a lot different from a short sale because you get to stay in your home and it doesn’t affect your credit like a short sale would. Hope this helps.

Arizona rental foreclosed on

by 2 Comments

Question:  I live in California but owned a rental in Arizona that was foreclosed on. I had an equity line of credit on that home when it was foreclosed on. I believe I owed about $90K on that equity line of credit. Can they now come after me for the money? Is my only recourse bankruptcy?

 

Answer:

Well all you can do it wait and see what the bank sends you in the mail. They will either send you a 1099 or they will send you a judgment for the $90k. Now, I know that Arizona is a anti-deficiency state, however, there are 2 statutes that apply to foreclosure and in a lot of cases, homes that have 2nd mortgages do not fall into the category of either of these statutes because the money was not used in the purchase of a home. You might be able to work out a settlement with the bank especially if you threaten them with the bankruptcy card. A good attorney can help you with that. Worst case, most people just bk.

I wish you would have found us earlier… you could settle your note as well and save a lot of headache. Good Luck

Counter offer to HELOC settlement

by 1 Comment

Question:  Hi, many of these subjects are interesting but my questions and situation is a bit different.
After going through a long process with my 1st mortgage, finally a loan modification with a 3 month trial is being worked on. Still owe about 145,000 on 1st mortgage. House value is now around 50,000. Took a HELOC of 30,000 of which I still owe 24,000. After unemployed and some rough times, just getting back on my feet. Heloc lender wants a lump sum at this point of 19,500. If I can’t come up with it then a down of $4,500 and a monthly of $200. If I could I would but can’t. I counter offer $50-$75 month. My weekly budget has no rooms for extras. I have not heard on my counter offer. Can you explain what will happen if they don’t accept to me, my house which I am trying to keep and working with my 1st lender. Thank you for any help or suggestions you can provide. will look out for a response.

Will 401k savings be affected in I foreclose on Michigan home?

by 1 Comment

Question:  My husband and I own a home in Michigan, but my husband has had to accept work in Iowa. I am currently still living in our Michigan home since I don’t see a good way to get out of our home. We have had an interest only loan on it for the 6 years we have owned it and an equity line as well so there has been 0 principal paid off on it. I owe $175,000 on a home that is currently worth about half of that, so I will be unable to sell it for what I owe. I’m not sure what to do. Unfortunately, we don’t make enough money between the both of us to pay for our Michigan home and for my husband to rent a home in Iowa so I’m afraid that my only option may be foreclosure. What I need to know is if I will still be responsible to pay the equity line if the home is foreclosed on and if either bank will be able to take my 401K savings? Also, my husband and I are both listed on the house deed, but the financing on both loans is in my name only. Will my husband be protected or will they be able to come after him for payment as well? Thank you for any advice you can give me.

Can I Settle my Equity Line of Credit with the Bank?

by 1 Comment

Question:  I own a property outright which has no mortgage. There is an equity line of credit which has come due, which I can not afford to pay in total. I consistently made payments on the equity line until November of 2011. The bank asked me to offer them a settlement which I have done and suggested that I not make anymore payments on the equity line. This has been dragging on for months. The bank asked me to let them appraise the property and then they would decide on the settlement. Is this normal procedure? Can you shed any light?

Can 2nd mortgage foreclose on me?

by Leave a Comment

Question:  I have a 1st and 2nd mortgage with one bank in Florida. Then another bank came and offered to pay my 2nd mortgage with that bank. My heloc was not closed with the first bank and i had an emergency got some money out of it. My 5 yr term with the 2nd bank expired. They have been calling me and offering 8% interest rate on my heloc. I have been negotiating for a lower interest. they wont approved. Bank is threatening to foreclose my property. Can they do it? Property value is way too low..there is no equity on the house in this current market. Please advise. Can the 2nd bank foreclose my property?

Answer:   Absolutely, the 2nd mortgage can foreclose on your property. When you signed on the dotted lines for the HELOC, you gave them the right to force the sale of the property, which was collateral for the loan, in the event you did not keep up your end of the deal. Unfortunately, banks don’t like to negotiate with homeowners very much. They have this assumption that homeowners have no clue what they are doing. So they don’t give you very good deals that seem very reasonable based on current market conditions. Yet when a 3rd party (attorney or real estate investor) negotiates with them, the bank will usually lose more money because the offer is even lower then what the homeowner proposed. Bottom line, banks flat out don’t make sense.

So you best bet is to have someone else, like an attorney, negotiate the terms with them and try to get them to reason with you. Unfortunately, they cost money, but they should be able to help.

Another option is to have someone settle that 2nd mortgage and wipe it out completely…

Let the bank know you are interested in settling, tell them your home is upside down by $50,000 or whatever the amount is, there is a first mortgage in front of them and they will end up paying more than what the property is worth. Let them know your attorney has advised you to file bankruptcy but you don’t want to go that route. (This will just by you some time, they will eventually foreclose.) Then you or preferable someone else, needs to go settle that note for pennies and that way you don’t lose your home.

We settle 2nd mortgages and have been very successful in doing so for homeowners with large 2nds. The great part is that it doesn’t cost you anything upfront.

Good luck, hope everything works out for you.