Question: I have a mortgage with one bank and an equity line of credit with another bank. If I let my home go into foreclosure, can the bank sue me for the equity amount? How does this work? My mortgage balance is slightly lower than the value of my house. With the real estate prices down, if I put my home on the market for its market value, with all the additional fees and closing costs, I would have to make an investment into having it sold via a foreclosure.
Response: You are better off doing a short sale than letting it go into foreclosure. Foreclosure should always be the last alternative as it will most adversely affect your credit. Based on your description, both loans are secured by equity in your home, i.e., if the house sells for its market value or even less, both lenders will be able to obtain what is due and owing to them. However, if you are concerned about putting money out-of-pocket, then consider a short sale since the bank will pay for all sale-related expenses and even offer you money to do a short sale, if the house is your primary residence. However, to answer your question specifically, the lender that gave you an equity line is unlikely to go after you because based on the description you provided, they will likely get their money (ex: if the house sells for its market value, the first lender will get what is owed to them, the balance will go to the second lender, and if anything is remaining, you can even claim the rest).
In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.
The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
Copyright © 2016 Law Office of Svetlana Kaplun, P.C.
modification, making home affordable, hamp, mortgage modification, harp refinance, making homes affordable, modifications, home affordable modification program, home affordable refinance program, hamp program, home loan modification, loan modification guidelines, foreclosures, foreclosure listings, foreclosure homes, mers, foreclosure settlement, foreclosure homes for sale, free foreclosure listings, foreclosure home, deed in lieu of foreclosure, foreclosure process, how foreclosure works, home foreclosure, foreclosure radar, bank foreclosure, home foreclosures, foreclosure listing, hud foreclosure, foreclosure laws, short sale vs foreclosure, stop foreclosure, totally free foreclosure home listings, foreclosure help, free government home foreclosure listing, free listing foreclosure home sale, free foreclosure listings with pictures, fannie mae foreclosure, independent foreclosure review, lawyers, power of attorney, personal injury attorney, attorneys, power of attorney form, durable power of attorney, power of attorney forms, criminal attorney, attorney search, medical power of attorney, free power of attorney, bankruptcy attorney, power of attorney template, power of attorney form download, durable power of attorney form, free power of attorney forms, general power of attorney, free printable power attorney form, lasting power of attorney, tax attorney, free power attorney forms, divorce attorney, ace attorney, disability attorney, attorney jobs, enduring power of attorney, attorney at law, patent attorney, free power of attorney forms to print, real estate attorney, injury lawyer, personal injury lawyer, defense lawyer, criminal defense lawyer, the lawyer, accident lawyer, a lawyer, criminal lawyer, motorcycle accident lawyer, rocket lawyer, bankruptcy lawyer, divorce lawyer, ask a lawyer, find a lawyer, lawyer referral, car accident lawyer, family lawyer, lawyer search, lawyer find, lawyer ratings, lawyer referral service, immigration lawyer, dui lawyer
