Heloc convert into unsecured debt
Heloc convert into unsecured debt
I'm having difficulties getting my ex-wife to agree to a short sale of the former marital home. Her name should be removed from the HELOC and my only option is to sell off the property. Her name is mentioned only on the HELOC. I tried to give her the 3 options: Option 1: we do a short sale, I'm out of the house, she's off the HELOC, and we both take a 200-300 point hit on our credit reports(which can be rebuilt quickly). Option 2: we don't do a short sale, the regular sale of the house pays off the first mortgage and maybe (hopefully a little bit of the HELOC which means I continue to pay off the HELOC little by little, over time, and it stays on her credit for the entire time takes to pay off (at least 10 years) Option 3: I let the house go into foreclosure, and we all know how bad that can be. Her suggestion is to sell the house for whatever I can get for it, use the proceedings to pay off the first, and maybe a little of the HELOC, and then once the HELOC lender sees that there is no more collateral tied to the loan, they will be forced to refinance it into a consumer loan thereby removing her name from the note in the process. My question is can that happen? Can the HELOC be converted into an unsecured debt?
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