What are my options if the sale price of a foreclosure sale was not enough to settle the debt for an HELOC?
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What are my options if the sale price of a foreclosure sale was not enough to settle the debt for an HELOC?
I had a first mortgage and a HELOC on my home. The home was foreclosed on recently.
Asked on June 28, 2012 under Real Estate Law, Ohio
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
HELOCs are subordinate to primary home loans. This means that the HELOC lender has claim to any money generated by a foreclosure, only after the primary mortgage lender recoups their full loss. Almost all HELOCs are considered “recourse loans.” The borrower is personally responsible for paying recourse loans in full, regardless of their property’s value. If the lender doesn’t recoup the full cost of the loan during foreclosure, they can sue the borrower for the remaining money owed. Please check with an attorney in your area as to the law in your state. Good luck.
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