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Caught in a Bind |
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I don't have a mortgage on my house, but I have a home equity line of credit on it [almost $500,000 in credit line]. In couple months I will have to pay other loan that I have from one investor, which I took for a business that I believed would work. I will have to use my home equity line of credit to pay my debt. I will have to pay this! But then I will not be able to pay my home equity line of credit to bank - I know that. Even the house was purchase 18 months ago for over $600,000 and I put other $50,000+ to improvements, I cannot sell the house for more than $450,000. That's a current market, unfortunately. I am from Europe and I don't understand details of US law, so I would like to know, what should happen and what is a procedure if I will not pay my home equity line of credit. Is there a way, how to let it be, so bank will take a house and I will not have to pay a rest of debt? I don't want this house anyway... I want to start over, if possible. Please advice. Thanks. |
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I think you'd better talk with a real estate lawyer. It's too bad you've been caught in such a bad situation. It's possible, if I remember California law right, that you won't be held responsible after a foreclosure auction doesn't bring enough to pay off the debt. But I could be wrong about that, which is why I think you should talk with a lawyer to make sure. But you won't be able to get a mortgage loan again, that's for sure, if you have a foreclosure.
Your best bet is to talk with the lender about that line of credit. They don't want to foreclose if they can find any way to avoid it. Perhaps something can be worked out. YOu should certainly try contacting them, and don't wait until the last minute.
By the way, that Home EQuity LIne of Credit is really a mortgage, and if you don't have any other one, it's your first mortgage. |
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Originally published on November 16, 2007 |
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