James A asked:
2 Months ago I lost my job. We have used all of our savings to live on for the last few months and kept our bills current. On top of this we have some HUGE medical bills from my sons birth two years ago that we are also still paying. I bought this home two years ago when the market was still good. It appraised for 210K at that time and I have a 30 year fixed rate of 5.75%. All sounds good until you factor in the “not enough income” into it. I have offered the house back to the bank and they have agreed to it. They will probably turn a VERY small profit on it or maybe lose a little because of the market turn. I understand how this will affect my credit score and that is not my worry. Right now we have NO money left and no one to turn to. This is our only option. My questions is what will happen to the open equity loan I curently have open. Will this loan be paid upon the foreclosure of the house??? Not sure how this works!?!?! Help!!!
Student Loan Refinancing
2 Months ago I lost my job. We have used all of our savings to live on for the last few months and kept our bills current. On top of this we have some HUGE medical bills from my sons birth two years ago that we are also still paying. I bought this home two years ago when the market was still good. It appraised for 210K at that time and I have a 30 year fixed rate of 5.75%. All sounds good until you factor in the “not enough income” into it. I have offered the house back to the bank and they have agreed to it. They will probably turn a VERY small profit on it or maybe lose a little because of the market turn. I understand how this will affect my credit score and that is not my worry. Right now we have NO money left and no one to turn to. This is our only option. My questions is what will happen to the open equity loan I curently have open. Will this loan be paid upon the foreclosure of the house??? Not sure how this works!?!?! Help!!!
Student Loan Refinancing
Tags: Credit Score, Current, Equity Line Of Credit
3 responses to The bank is foreclosing on my home (voluntary) and I have a equity line of credit that is open?
Mortgage Finder
the deed in lieu allows the 1st lien holder to sell and be made whole then any profit from that must be used to pay off the second lien holder and if not enough to satisfy both loans then the 2nd will sue you to be made whole in all of this as you do owe the money. It may throw you into bankruptcy to keep from paying them but heck at this point your credit is shot any way.
Sorry to hear about your situation but that is what will happen
The bank is foreclosing on my home (voluntary) and I have a equity line of credit that is open?
Mortgage Finder
The first lender will not take back the property if you tap into a second note on the property, since the second lien would still be valid in a deed in lieu, only an official court order could eliminate the second i.e. foreclosure
as soon as you try and tap the second they will shut it down
But talk with a mortgage broker
The bank is foreclosing on my home (voluntary) and I have a equity line of credit that is open?
Credit Report
The first poster is the most accurate, but another scenario that I have seen is the second lender enters into a settlement with the first lender if there is an auction.
Another option you don’t mention here is a short sale.
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