If my home goes into foreclosure what happens to my Home Equity Line of Credit?

February 2nd, 2009 by Jarad

Question: I live in Idaho. If my home goes into foreclosure what happens to my Home Equity Line of Credit that is attached to the value of the property?

Answer: -Your home equity line of credit (HELOC) gets wiped out if no one bids. Then, typically your 2nd lien holder will 1099 you or file for a deficiency judgment. It’s more common to receive a 1099.

Tags: , , ,

2 Responses to “If my home goes into foreclosure what happens to my Home Equity Line of Credit?”

  1. Christy Says:

    Does this apply to all states? I live in Wisconsin and am going through deed-in-lieu of foreclosure but I can’t seem to get any answers from Wells Fargo as to what will happen with my line of credit.

  2. Jarad Says:

    Yes, typically with a deed-in-lieu foreclosure, you are still obligated to junior lien holders. Meaning in order for you to “give them the deed” you have to pay off or satisfy the junior lien holders as well. Deed-in-lieu foreclosure works well when you only have a 1st mortgage. But yes something will happen to it, either get written off or they’ll file a judgment.

Leave a Reply

Ask The Expert?

Have a question that hasn't been answered? Ask us a question by clicking here.

Search Blog

Featured Product

foreclosure home study course
"The Investors Complete Foreclosure Home Study Course - Only $47"

Discover a Proven System for Buying Real Estate Foreclosures 30%, 40%, and 50% Below Market Value. Generate Huge Returns Using This Step-by-Step Foreclosure System.

Learn More - Click Here

Build Your Wealth

See our investment properties

Looking for Great Returns and Positive Cashflow? Build your wealth by investing in real estate.

Check out our inventory! »

Free Foreclosure Reports

Affiliate Disclosure

We review products from time to time and receive compensation from the companies whose products we review. We review each product thoroughly and give high marks to only the very best. We are independently owned and the opinions expressed here are our own...

Comodo SSL