I have a mortgage and home equity line of credit I am in Florida. If my property is foreclosed upon what happens to the equity line of credit?

September 11th, 2009 by Jarad

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.

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2 Responses to “I have a mortgage and home equity line of credit I am in Florida. If my property is foreclosed upon what happens to the equity line of credit?”

  1. leon vazquez Says:

    i lived in a home 3years decide to get a second equity line of credit. ihad put 65000. down decde on the eqity loan from cit bank use the money to pay off my car $33,000. then later on decide to sale my home and go to bigger home,which i did. inthe mean time the home did sale on short sale.it when tofore closure. now 2years later i nget a none registered letter say if I do coctest. this
    debt i will be sued by attorney. at this I on total federal compensation disability. what will happen/

  2. Jarad Says:

    Yeah, so basically they are asking you to pay the deficient amount. Since the lenders assume homeowners don’t know what they are doing they will use ways in convincing you to pay the full amount, when in reality, they will settle for a much smaller amount. And if they don’t for some reason, most in this situation will just file bankruptcy which will eliminate the debt entirely. But yes, you need to try and settle something with the bank… a smaller payoff amount.

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