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?
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.
Question: I work for the bank that holds my home equity line. I do not want to default on it. (It is only a 10k heloc) Can I just continue to pay on it if my mortgage loan is defaulted on?
Answer: You are free to continue to pay on it if you want. However, you have to realize that sooner or later, the bank in first position will foreclose on you. And if there is no equity in the home, more than likely your 2nd will be wiped out, regardless if you made your payments or not. To me, it doesn’t make sense to make payments on the 2nd if you are not making payments on the 1st mortgage. In the end, your bank will still want the $10k that you borrowed, which you can gladly workout some sort of settlement with them until it’s paid off. Offer them payments over 10 years like you agreed on or give them $2000 upfront as a full payoff. They’ll treat it just like any other defaulted loan even if you work there. What you do want to try to avoid is a deficiency judgement. You want to try and get a full satisfaction so they can’t file a judgment against you.
Question: I bought a house in 2005. I got a mortgage on the house and put down 10%. The bank also gave me a heloc at the same time on the same home. I did not receive any of the $…the bank took as further down payment. Looking back it doesnt make sense that the bank did this. My mortgage broker was the one whom recommended. Was this legal?
Question: I had a short sale on a property in 2010 and I have a second home equity line that was not paid off. they say I owe the full amount. Can I declare insolvency and not have to pay ?
Question: my mother-in-law holds the deed to a brand new maufactured home in Lytle Creek CA. She also has excellent credit and owns other properties. She and husband are retired. The manufactured home is free and clear. Can she get a line of credit on this property?