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home equity line of credit

I have a home equity line of credit. I can’t afford to make the payments. Can the lender foreclose?

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Question: I have a home equity line of credit on my home in florida that I owe about $75,000 on. I owe about the same on my 1st mortgage that is with the same lender. If I can’t afford to make the payments on the line of credit but continue to make my 1st mortgage payments can the lender foreclose on my home?

Answer: – Yes, the 2nd can and most likely will foreclosure on your home, even if it’s the same lender because you are not meeting your obligation to them. It’s just a matter of time. You might try to do a Loan Modification especially if your 1st and 2nd mortgages are with the same lender

I own a home in Southern California. I bought the home using my VA benefits.

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Question: I own a home in Southern California. I bought the home using my VA benefits. I am 3 months behind in my mortgage. It doesn’t look like the mortgage co. (Countrywide) is going to modify the loan so that I may keep it, already contacted HUD and they sent a modification proposal to Countrywide 30 days ago but Countrywide has yet to receive it. My question is, I owe $64,000 on a Home Equity Line of Credit I got through Washington Mutual Bank on the house. If Countrywide forecloses, do I still owe the Equity Line of Credit? Will Washington Mutual come after me for the money? I owe $220,000 on the house, it was just appraised at $175,000. Thank you.

Answer: – California may be one of the few states where they don’t come after you for a deficiency judgment. If your home is foreclosed on, typically they will 1099 the borrower for the amount they lost. However, VA loans have special exceptions. With VA loans, I believe they may have the right to come after you for the deficiency judgment. You may want to check with an attorney in California on this, but it seems like that’s what I remember.

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

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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.

Arizonas (anti-deficiency state) law when foreclosed on

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Question: I have a home in Arizona [anti-deficiency state] that was purchased with an 80/20 loan. I have never refinanced the loans. We were in the process of negotiating a short sale, got approval from the first [with Country Wide] and they agreed to pay the 2nd [Citi] $3k, when we went back to Citi to get final approval we discovered that they charged off the 2nd and sold the loan to a subsidiary which has now turned it over to an attorney that claims they are going to file a deficiency judgement against me and collect the debt. They claim that since it was a second mortgage and it was charged off that they can do this. It was a second but it was a “purchase money” loan. Can they come after me for the deficiency?

Equity Line of Credit and Foreclosure

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Question: I live in California; if my home goes to forclosure and I have a an equity line of credit, will the line of credit, $150,000 also be wiped out? The line of credit is secured by the property.

Answer: Yes, if the line of credit is secured by the property in foreclosure. Most homeowners have a home equity line of credit that takes a 2nd lien position on their home. If the home is foreclosed on by the 1st lien holder and no one bids at the auction, the 2nd is wiped out, and the bank has the option of issuing a 1099 to the homeowner or filing a deficiency judgment against them. In most deed states, including California, it’s very uncommon for the lender to file a deficiency judgment. If you know what you are doing, there are things you can do to prevent a deficiency judgment altogether so it’s never an issue.