Posted on: 29th Jun, 2010 05:31 pm
We got a mortgage and a line of credit when we bought our house 3 years ago. We decided to stop paying the mortgage last May and now we are in a process of a loan modification on our 1st main mortgage. The line of credit is 94,000 and they offer us to repay just 20,000 and close the line. We can afford to pay right now just 10,000 so we submitted the offer and wait for an answer. My question is: Does it worth it to pay even 10,000 and close the line of credit? I heard that because we are in CA, they can't get the money anyway, although the due amount will be in our credit history. If we decide not to pay them at all, is this the only trouble this can cause /bad credit history/?
Welcome iony,
As the line of credit was a part of your purchase mortgage, the lender will not be able to come after you for the amount if your property is foreclosed by the first lender. However, it can be mentioned in your credit report. It is better to pay off the dues as it will be mentioned in your credit report as "paid as settled".
As the line of credit was a part of your purchase mortgage, the lender will not be able to come after you for the amount if your property is foreclosed by the first lender. However, it can be mentioned in your credit report. It is better to pay off the dues as it will be mentioned in your credit report as "paid as settled".
If we get a modification on our 1st loan, can they go after us for the line of credit?
if there are two mortgages, the line of credit, being the second mortgage, will drop off the property during the foreclosure, but you will still be liable for the debt.
