Posted on: 23rd Jun, 2009 04:42 am
I live in Florida and bought during the peak in 2006. I owe $369K on my first and $140K on my HELOC - property only worth about $300K. I have taken a 65% pay cut with a new job etc etc. The mortgages are current but am out of savings. I know that my 401K can't be touched. The property was listed a week ago as we are going to try for a short sale. After reading the numerous threads on this/multiple sites, it looks like that even if I can a satisfaction of settlement from both the 1st AND 2nd through the short sale, that the HELOC will still charge off the difference and sell to a collection agency. Is that correct? Then I will have to either negotiate with the collection agency or file BK-7?
Thank you
Thank you
hi gregg,
if the sale of the house does not pay off the heloc, the second lien holder can come after you for the balance amount of the loan. if the heloc is partially paid, they may still come for the deficient amount. they may charge off the debt to a collection agency or may get a deficiency judgment against you. you can, however, negotiate with the second mortgage holder and settle the debt for less than the actual amount owed and pay it off.
if the sale of the house does not pay off the heloc, the second lien holder can come after you for the balance amount of the loan. if the heloc is partially paid, they may still come for the deficient amount. they may charge off the debt to a collection agency or may get a deficiency judgment against you. you can, however, negotiate with the second mortgage holder and settle the debt for less than the actual amount owed and pay it off.