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03-06-2008, 04:14 PM

The HELOC is a lien on the property it is not a credit card, it does not get up and leave the property and follow you around like a credit card. It is a filed and recorded Lien on the subject property just like any Trust Deed filed on the subject property.

The problem is that the HELOC if not paid and obtained for cash out purposes and if the property is foreclosed on, Deed in Lieu or Short Sale the Lender has the right to obtain a deficiency judgment and sell it to a collection company to follow you around.

The information being provided is partially correct, however substantially wrong. Since the HELOC is a lien on the property it does not automatically become a debt outside of the property and if it was used as a purchase money instrument any portion of the HELOC used in the purchase money instrument will be treated as purchase money and may not have the available ability to perfect a deficiency judgment. I am not an attorney, I am a lender and as such, we do these things and can not do these things.

So as regards the HELOC, if you default on one and there is a deficiency judgment, you bet that it can follow you around, if you do the short sale properly then there should be no problem, i.e. negotiate with the lender prior to the short sale for debt forgiveness....

Although you may have been issued a "Credit Card" in conjunction with the HELOC loan to use for draws against the HELOC ---- IT IS A DEED OF TRUST THAT IS RECORDED AGAINST THE PROPERTY. I does not grow little feet and leap off the title and follow you around unless the lender does move for the deficiency judgment.

Please read the Deed of Trust and Note agreement with you HELOC documents from closing and you will see that this is a Real Property Lien. If you negotiate with the lender and there is substantially less value to the property, you maybe able to obtain forgiveness of the debt. Please see this thread.

http://www.loansafe.org/forum/stop-foreclosure-tell-us-your-story/
Since he negotiated it correctly he is in the free and clear status with the HELOC, maybe not with the IRS, but with the HELOC.

03-06-2008, 04:14 PM	#8 (permalink)
Mary Salzer Guest Posts: n/a	Re: Heloc The HELOC is a lien on the property it is not a credit card, it does not get up and leave the property and follow you around like a credit card. It is a filed and recorded Lien on the subject property just like any Trust Deed filed on the subject property. The problem is that the HELOC if not paid and obtained for cash out purposes and if the property is foreclosed on, Deed in Lieu or Short Sale the Lender has the right to obtain a deficiency judgment and sell it to a collection company to follow you around. The information being provided is partially correct, however substantially wrong. Since the HELOC is a lien on the property it does not automatically become a debt outside of the property and if it was used as a purchase money instrument any portion of the HELOC used in the purchase money instrument will be treated as purchase money and may not have the available ability to perfect a deficiency judgment. I am not an attorney, I am a lender and as such, we do these things and can not do these things. So as regards the HELOC, if you default on one and there is a deficiency judgment, you bet that it can follow you around, if you do the short sale properly then there should be no problem, i.e. negotiate with the lender prior to the short sale for debt forgiveness.... Although you may have been issued a "Credit Card" in conjunction with the HELOC loan to use for draws against the HELOC ---- IT IS A DEED OF TRUST THAT IS RECORDED AGAINST THE PROPERTY. I does not grow little feet and leap off the title and follow you around unless the lender does move for the deficiency judgment. Please read the Deed of Trust and Note agreement with you HELOC documents from closing and you will see that this is a Real Property Lien. If you negotiate with the lender and there is substantially less value to the property, you maybe able to obtain forgiveness of the debt. Please see this thread. http://www.loansafe.org/forum/stop-foreclosure-tell-us-your-story/ Since he negotiated it correctly he is in the free and clear status with the HELOC, maybe not with the IRS, but with the HELOC.