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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Owing Money on a HELOC - going into foreclosure Posted by Ryan on February 20, 2008 at 6:31 PM In Reply to: Re: Owing Money on a HELOC - going into foreclosure posted by Gerry on February 19, 2008 at 11:47 AM : : : : : I stopped paying my mortgage and HELOC 4 months back. I understand the second mortgage holder is holding the bag, so to speak. I used the money for other things, and I have lost most of it. Are there any repurcussions other than my credit score? : : : : "Other things" like what? Assuming the First forecloses and wipes the Second off your property, the bank could go and get a Deficiency Judgement and chase you for the money for the rest of your life. They could have the sheriff seize your bank accounts, garnish your wages, take your car (if it's paid for). They could call you into a Judgement Debtor hearing and take the cash out of your pockets, the watch off your wrist and the ring off your finger. If you die and leave anything behind they could go after your estate. That being said they may do absolutely nothing at all. No one knows. : : : Question: If the 1st forecloses, then the 2nd will probably be wiped out. : : : Does the 2nd have to institute their own foreclosure action : : : in order to pursue the debtor? Or is it enough that their lien : ": : is wiped out at the sale by the foreclosure on the 1st? : : : Does the 2nd need to institute judicial foreclosure action in order to : : : receive a deficiency judgement? (This is assuming that the 2nd is : : : a HELOC and not involved in the original purchase of the house)? : : : Thanks. : : The Second will not initiate Judicial Foreclosure as there is nothing to foreclose on. They will initiate a lawsuit for nonpayment to get a Deficiency Judgement. Again many lenders have so many foreclosures that most probably will do nothing. However, some lenders will sell the debt to credit collectos who will go after debtors. : In Arizona the following applies: : A note regarding Deficiency Suits: A lender may not bring a deficiency suit against a person who lost a property that is 2.5 acres or less at a foreclosure, provided the property was a single one-family or a single two-family dwelling. This is so even if the high bid at foreclosure was less that the balance due on the loan. However, in foreclosures against other types of property, a deficiency suit is allowed, but is limited to the difference between the balance owed and the fair market value of the property, and then only if the suit is brought within ninety (90) days of the power of sale foreclosure. : California has a similar law. Other things meaning I invested in a business and the stock market. I have lost all of it. It's under 100k. I feel awful and it's not fun for me owing money and going through this, but I just want to make sure I can't get into any trouble and/or lose money. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : : : : : I stopped paying my mortgage and HELOC 4 months back. I understand the second mortgage holder is holding the bag, so to speak. I used the money for other things, and I have lost most of it. Are there any repurcussions other than my credit score? : : : : : "Other things" like what? Assuming the First forecloses and wipes the Second off your property, the bank could go and get a Deficiency Judgement and chase you for the money for the rest of your life. They could have the sheriff seize your bank accounts, garnish your wages, take your car (if it's paid for). They could call you into a Judgement Debtor hearing and take the cash out of your pockets, the watch off your wrist and the ring off your finger. If you die and leave anything behind they could go after your estate. That being said they may do absolutely nothing at all. No one knows. : : : : Question: If the 1st forecloses, then the 2nd will probably be wiped out. : : : : Does the 2nd have to institute their own foreclosure action : : : : in order to pursue the debtor? Or is it enough that their lien : : ": : is wiped out at the sale by the foreclosure on the 1st? : : : : Does the 2nd need to institute judicial foreclosure action in order to : : : : receive a deficiency judgement? (This is assuming that the 2nd is : : : : a HELOC and not involved in the original purchase of the house)? : : : : Thanks. : : : The Second will not initiate Judicial Foreclosure as there is nothing to foreclose on. They will initiate a lawsuit for nonpayment to get a Deficiency Judgement. Again many lenders have so many foreclosures that most probably will do nothing. However, some lenders will sell the debt to credit collectos who will go after debtors. : : In Arizona the following applies: : : A note regarding Deficiency Suits: A lender may not bring a deficiency suit against a person who lost a property that is 2.5 acres or less at a foreclosure, provided the property was a single one-family or a single two-family dwelling. This is so even if the high bid at foreclosure was less that the balance due on the loan. However, in foreclosures against other types of property, a deficiency suit is allowed, but is limited to the difference between the balance owed and the fair market value of the property, and then only if the suit is brought within ninety (90) days of the power of sale foreclosure. : : California has a similar law. : Other things meaning I invested in a business and the stock market. I have lost all of it. It's under 100k. I feel awful and it's not fun for me owing money and going through this, but I just want to make sure I can't get into any trouble and/or lose money. [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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