Question

If the property get foreclosed, I'm I still liable to the 2nd mortgage (HELOC),with the new servicer?

I used 2 interest only loans (ARM & HELOC) on my property that I bought in 2006. I lost my job, & didn't make payments for last 9 months. I received a letter from my Lender (BOA)stating they sold or transfer my HELOC to Real time ReSolutions(Debt Collector). My current job income is not enough to make the payments & unable to get a loan modification. (Current value of the property is 50% lower than purchased price).If property get foreclosed, I'm I still liable to HELOC? or new servicer (Real time ReSolu) still try to collect money? ( can they garnish my salary) I'm in California. If I go for a deed of lieu, will it help anyway..if so.what do I have to do? I'm so stressed and now all this financial problems are taking a toll on my health

4 years ago - 3 answers

Best Answer

Chosen by Asker

California is a non recourse state, however, this normally apply to first mortgage home loans. Your second, junior liens or HELOC could do one of three things. The could forget the mortgage and write it off or they can come after you for the balance of the mortgage or they could sell the note to a debt collector.

Apparently Bank of American did the later.

About garnishing your salary that is an option.

What you should do is go over your mortgage loan docs that you signed for your HELOC. There might be a legal way for you to stop the collection agency from bothering you and causing you financial difficulties. If you are not able to decipher mortgage loan docs you should engage the help of a real estate para Legal or someone you know in the law profession. Look for something that says total collateral considerations shall be. You might also see if there is a paragraph that says if this is a a recourse or non recourse mortgage note.

I hope this has been of some benefit to you, good luck.


"FIGHT ON"

4 years ago

Other Answers

Yes you are. 2nd mortgages DO NOT have the same protections as a primary mortgage. Your salary CAN be garnished if they obtain a judgment against you, which is VERY likely. This is WHY it was such a BAD idea to buy a home needing two mortgages. If you had a 20% like you were supposed to, you would not be in this mess. Hopefully you will not fall victim to the next housing bubble and buy a house that you need two mortgages in order to purchase it.

by Ryan M - 4 years ago

yes you are still liable on HELOC. foreclosure or deed in lieu does not make that go away. they will never stop trying collect until you file for bankruptcy protection.

you took a big gamble on borrowing that % of purchase price. tough break.

by David Z - 4 years ago