QUESTION
Can a bank foreclosure and give me a deficiency judgement on a home equity line of credit loan?
Asked on Apr 18th, 2013 on Foreclosures - Arizona
More details to this question:
Can a bank foreclosure and give me a deficiency judgement on a home equity line of credit loan? The money was used in a business that went bankrupt in 2009. I reported it in the internal revenue services in 2011. Can they legally take my grand parents by force?
6 ANSWERS
If the HELOC contract states that it is a recourse loan, then yes the lender can sue you in court and obtain a money judgment for the difference between the auction price and the loan balance ("deficiency"). A non-recourse loan means that the lender's remedy is limited to taking back the property regardless of the loan balance. Since the purpose of the loan was for a business and not related to the property, then I expect it is a recourse loan. I have no idea what you mean by taking your grandparents by force.
Answered on May 08th, 2013 at 6:05 AM
Generally speaking, a lender can seek all of the money it is owed under a promissory note. It does not matter what the money was used for. You should hire a lawyer to negotiate with the bank and look for counterclaims against it.
Answered on Apr 23rd, 2013 at 10:15 PM
Richard hirsh
Not sure why you are mentioning grand parents but otherwise, yes, the bank can take a deficiency on a home equity line of credit regardless of what the purpose of the loan was.
Answered on Apr 23rd, 2013 at 2:21 PM
1 Award
In California, the lender can only do that by way of a judicial foreclosure, unless there was a senior loan which foreclosed first. If that happened, yes, the equity lender can sue you personally after the senior lender forecloses.
Answered on Apr 22nd, 2013 at 2:16 PM
The bank can pursue you on a equity line after your foreclosure.
Answered on Apr 22nd, 2013 at 2:15 PM
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It depends on the exemption laws of the state where you live. Each state has a list of exemptions, which is property that is protected from creditors. Exemptions differ dramatically state to state. You can also talk to a good bankruptcy attorney in order to determine your rights.
Answered on Apr 22nd, 2013 at 2:15 PM