Posts Tagged ‘rental property’

HELOC and 2nd Home

March 26th, 2012 by Jarad

Question:  I have a home (rental) with a first mortgage with one bank and a line of equity with another (Chase). We have our personal home with just a first mortgage but also with Chase. If we default on the equity line of credit tied to the rental home can it effect our current home since its with the same bank?

Answer:  – No, unless you used your personal property as additional collateral for getting the HELOC on the rental property. Because they are completely separate properties they can’t do anything to force the sale on you just because to don’t pay on the one. What they can do if you foreclose on the rental is file a judgment against you so you’d have to re-pay that, but usually that doesn’t happen and there are ways to prevent that from happening. Normally they will 1099 you for the amount they lost and you’d have to pay taxes on it.



Rental home foreclosed in California

March 21st, 2012 by Jarad

Question:  I have/had a rental home in California. The bank (Chase) held the 1st and 2nd on the home. They foreclosed on the home and have since sold/auctioned it off. However, they (via a debt collector) are continuing to contact me in an effort to get me to pay off the 2nd/equity line ($32,000). I do not have that kind money and am struggling to hang on to my primary residence. What can they do to me and what are my options?

Answer:  – Your best option is to work with them and try to reach some sort of agreement, pay plan, settlement or payoff. If you can’t work something out, most people will file bk. In many cases, if you let the bank know you are serious about filing bk, they will work something out with you. We’ve been very successful in settling 2nd mortgages before they go to auction but you can still do the same after the auction to avoid the deficiency judgment.



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