Posted on: 27th May, 2008 10:53 pm
We have a rental property in merced, where we have a first mortgage and a line of credit. It used to be our primary residence from july 2004 to Oct 2006. The rent is not enough to pay the mortgage payment. If we do a DIL or foreclosure, will the lender demand us to pay the line of credit. Will it be included in the DIL or foreclosure? Will this be eligible for the forgiveness of debt bill since we lived in the house for at least 2 years. Please advise.
Hi rosalinda,
Welcome to the forum.
Are the HELOC and the first mortgage from the same lender? If not then you will have to take approval from the second lender also from whom you have taken the HELOC. If he doesn't approve the deed in lieu then you will still owe to him and need to pay back the due debt. Otherwise he can place lien on your other properties.
Feel free to ask if you have any further questions.
Best of luck,
Larry
Welcome to the forum.
Are the HELOC and the first mortgage from the same lender? If not then you will have to take approval from the second lender also from whom you have taken the HELOC. If he doesn't approve the deed in lieu then you will still owe to him and need to pay back the due debt. Otherwise he can place lien on your other properties.
Feel free to ask if you have any further questions.
Best of luck,
Larry
welcome rosalinda,
did your second mortgage lender approve the deed in lieu of foreclosure? if he doesn't accept the deed in lieu then he can place lien and sell the due debt to the collection agency.
if the lenders accept the deed in lieu of foreclosure then you need not to pay the deficiency judgment. and also you can get the tax relief according to the mortgage debt forgiveness act.
let me know if you have any further questions.
did your second mortgage lender approve the deed in lieu of foreclosure? if he doesn't accept the deed in lieu then he can place lien and sell the due debt to the collection agency.
if the lenders accept the deed in lieu of foreclosure then you need not to pay the deficiency judgment. and also you can get the tax relief according to the mortgage debt forgiveness act.
let me know if you have any further questions.