If our home was foreclosed on 1 1/2 years ago,are we still responsible for the home equity loan that was on it?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
If our home was foreclosed on 1 1/2 years ago,are we still responsible for the home equity loan that was on it?
Asked on December 27, 2010 under Real Estate Law, Michigan
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
If there's money left from the proceeds after a foreclosure, after the taxes and the first mortgage are satisfied, it would go toward the HELOC (assuming no other lien had priority). However any unpaid balance could result in a deficiency judgment against the foreclosed property owner.
A "deficiency judgement" is a judgement that can be obtained by a lender against a borrower if their property sells for less than the remaining balance on the mortgage. Technically, it's only called a "deficiency judgment" if at least part of the loan was paid off by the foreclosure sale of the property, so if the no money was applied to the HELOC, it's just a lawsuit and judgment on the loan, not a deficiency judgment. But either way, the borrower is liable for it.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.