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Maryland foreclosure and line of credit

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Maryland ForeclosureQuestion:  i have a home in Maryland that has been foreclosed I had an 80/20 loan with the 20 being a line of credit. My mortgage company is asking for full amount 50,000 without budging and threatening to garnish my paycheck by taking me to court. Is there any way of stopping or slowing them?

Answer:  – Yes, but you may not like it…
One way to stop the mortgage company is to file bankruptcy. Depending on your situation, sometimes this is the best solution. It’s always a good idea to sit down with an attorney who deals with situations like these and ask for help. [Read more…] about Maryland foreclosure and line of credit

Collection Agency For Line of Credit

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Question:  My primary home was foreclosed on in May of 2011. The two lines of credit have been reported by the lender to Equifax as written off back in October of 2008. Some collection agencies are calling me now asking to pay for these line of credit. I must say this, I never used any $ amount from these HELOCs. That was the original set up of the loan. Please let me know. Can they ask for anything now?

Answer:   Yeah this typical when you go through a foreclosure. A collection agency for your line of credit is assigned to handle your case. They will call you and try to work something out. Either a payment plan or work out a settlement. Whatever you do, don’t just ignore them and do nothing. Try to work with them.

Short Sale? Can we Settle instead of payment plan?

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Question:  We are in the process of doing a short sale to sell our condo in Illinois. We have a mortgage and a line of credit through Wells Fargo. The mortgage is approved for short sale, asking us to bring $20k to closing. The line of credit is almost approved but they are saying that we will have to settle that loan AFTER we close by setting up a payment plan. We cannot afford to pay on this line of credit and we are now considering foreclosure. If we foreclose, can the bank come after our assets? Can the bank come after us for the line of credit? We are moving out of state. Will we have to go to court? Will foreclosure permanently be on our record, or just for 7 years? Will we be able to get loans in the future? Thank you for your help!

Answer:

These are great questions. You have about 3 or 4 questions here so I will try to answer them accordingly. First, the bank can’t come after your assets directly but they “could” file a judgment against you where you will have to pay them the amount that was deficient. The line of credit is what gets most people into trouble. They are the ones who take the biggest losses. So they are the ones that usually come after you. You can actually settle the 2nd mortgage completely for approx. 10% to 15% of the original note if you know what you are doing. That way there is no repayment plan. It’s basically wiped out for good. See most banks are worried that you will file bankruptcy, so they are willing to work with you if you provide them a quick settlement upfront. Third, you shouldn’t have to go to court, unless you decide to fight the judgment if it even goes that far. Fourth, foreclosure will be on your record for about 7 years. Bankruptcy is about 7-10 years. A short sale is about 2-3. A settlement has NO effect on your credit because it was paid off in full. No matter which route you choose, you will eventually be able to get loans again. It’s just a matter of time.

Filing for bankruptcy. My second mortgage, now my first?

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Question:  I am in the process of filing for bankruptcy. I am filing chapter 13 so I can have my second mortgage, which is a line of credit through Bank of America, dismissed. My attorney just called and said that because my first mortgage was obtained after my HELOC, only because we refinanced, that the court may deem the HELOC as my first mortgage. Is this possible?