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.