If HELOC is writte off, will the Lien dissapear ?

[misita]

Hi everyone:

My friend arranged with a homeowner to get the deed of the property in Masschusetts paying him some money and the homeowner remains on the mortgage. Payments are done ok so far towards the first lien holder . Now, the homeowner previously got a HELOC for 25 K with BOaf. My friend the one on the deed stop paying the HELOC just paying the first lien holder. The house is underwater,.. Can Bank of America proceed to foreclosure on my friend ?,, can he up to settle with bank of america for let's say $ 1 K., Now, my friend called bank of america and was told that the HELOC has been or in the process of been write off,, If in fact this happend, will the lien be released from the property?,

Can someone please clarify or just comment on this one.. I am confused.

Thanks in advance for your input.

[hope67]

Originally Posted by misita

Hi everyone:

My friend arranged with a homeowner to get the deed of the property in Masschusetts paying him some money and the homeowner remains on the mortgage. Payments are done ok so far towards the first lien holder . Now, the homeowner previously got a HELOC for 25 K with BOaf. My friend the one on the deed stop paying the HELOC just paying the first lien holder. The house is underwater,.. Can Bank of America proceed to foreclosure on my friend ?,, can he up to settle with bank of america for let's say $ 1 K., Now, my friend called bank of america and was told that the HELOC has been or in the process of been write off,, If in fact this happend, will the lien be released from the property?,

Can someone please clarify or just comment on this one.. I am confused.

Thanks in advance for your input.

A write-off doesn't mean your friend is no longer obligated to pay the loan, it is simply an accounting term to use when filing their tax.
If HELOC is 100% unsecured at this point, your friend can negotiate a settlement, he can start with 10% of the balance. His other option is to get the lien stripped off his property by filing chapter 13. However, his house value should be equal or less than the balance of the first, if the value of the house is $1 more than the balance of the 1st, the 2nd cannot be stripped.