Foreclosure University HELOC

Home foreclosed in Arizona. Still Paying Home Equity Line of Credit?

March 29th, 2012 by Jarad

Question:  Our house was foreclosed in Arizona on a little over a year ago in AZ. But we are still getting (and paying) the bill for a Home Equity Line of Credit we had on the same property. Is there anything we can do to reduce or eliminate this bill since we were foreclosed?

Answer:  -Yes, if I understand you correctly, you are making the same payment on your HELOC as you were before the auction. Usually in a situation like this, most homeowners will settle with the bank for a smaller amount and create some sort of payment plan to payoff the note within a short time. Another option is to file bankruptcy and wipe it out completely. This is the main reason why banks will usually work with you in finding a solution because they would rather have some money instead of no money. Hope this helps.



HELOC and 2nd Home

March 26th, 2012 by Jarad

Question:  I have a home (rental) with a first mortgage with one bank and a line of equity with another (Chase). We have our personal home with just a first mortgage but also with Chase. If we default on the equity line of credit tied to the rental home can it effect our current home since its with the same bank?

Answer:  – No, unless you used your personal property as additional collateral for getting the HELOC on the rental property. Because they are completely separate properties they can’t do anything to force the sale on you just because to don’t pay on the one. What they can do if you foreclose on the rental is file a judgment against you so you’d have to re-pay that, but usually that doesn’t happen and there are ways to prevent that from happening. Normally they will 1099 you for the amount they lost and you’d have to pay taxes on it.



Collection Agency For Line of Credit

March 23rd, 2012 by Jarad

Question:  My primary home was foreclosed on in May of 2011. The two lines of credit have been reported by the lender to Equifax as written off back in October of 2008. Some collection agencies are calling me now asking to pay for these line of credit. I must say this, I never used any $ amount from these HELOCs. That was the original set up of the loan. Please let me know. Can they ask for anything now?

Answer:   Yeah this typical when you go through a foreclosure. A collection agency for your line of credit is assigned to handle your case. They will call you and try to work something out. Either a payment plan or work out a settlement. Whatever you do, don’t just ignore them and do nothing. Try to work with them.



My California house went into foreclosure and sold at auction.

March 22nd, 2012 by Jarad

Question:  I live in California. My house went into foreclosure and sold at auction. I have a home equity line that I owe 54K on. The home equity line is current. If I continue to pay on it, what will happen? Will I be able to continue to make payments or will they come after me for the full amount?



Can I Short Sale My HELOC?

March 1st, 2012 by Jarad

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?



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