Posted by Rich-CA on January 22, 2009 at 20:50:13:
That is the only thing they can foreclose since the lien can only be placed on property. The lien remains in place until paid off or removed by the court (ie, bankruptcy). Rather than hire an attorney, I would just have an initial meeting with an attorney to see if its worth it to engage their services. If BK is your only solution, then they will likely refer you to a BK attorney, then you will know.
Bank didn’t close equity line after Sale - Posted by Brandon_FL
Posted by Brandon_FL on January 21, 2009 at 15:08:05:
Have an equity line on a home I sold. Bank didn’t close the line. I now am financially unable to pay back the equity line. What should I do? Thanks
what the ? - Posted by DJ-nyc
Posted by DJ-nyc on January 23, 2009 at 12:22:28:
How did the title pass to a new owner with a lien (HELOC) still on the home?? I would call the title company. The new owner should be concerned as well…
DJ-nyc
Re: Bank didn’t close equity line after Sale - Posted by River City
Posted by River City on January 22, 2009 at 10:09:16:
Does the HUD-1 (page 1 right side) indicate that the equity line was paid? If not, it would have been your responsibility to pay it, not the lender’s or the closer. If it is listed on the HUD-1, the closer should have paid it off. Lenders do not generally withhold funds to pay an equity line themselves. The funds would probably have come from the closing proceeds, so the closer would have paid it if it is listed on the HUD-1 to be paid.
Did the Escrow officer - Posted by Rich-CA
Posted by Rich-CA on January 22, 2009 at 09:49:45:
fail to include the HELOC payoff? You might want to start there to find out what happened. And where did the $$$ from the sale that would have paid this off go? If they forgot to pay off the HELOC you should have gotten enough cash to pay this.
Re: what the ? - Posted by Brandon_FL
Posted by Brandon_FL on January 23, 2009 at 12:39:11:
New Owner has already been foreclosed and the new owner is Busey Bank. My HELOC is with First Horizon. I looked up the document and Busey Bank sued First Horizon. What’s that about?
Re: Bank didn’t close equity line after Sale - Posted by Brandon_FL
Posted by Brandon_FL on January 22, 2009 at 11:06:14:
So bank risk equity lines by not requiring them to be paid off when the property that the equity line is from is sold?
Re: Did the Escrow officer - Posted by Brandon_FL
Posted by Brandon_FL on January 22, 2009 at 11:08:46:
This was years ago. I am just now at the point where I can’t afford to pay it off. Been making min. payments since the property sold. No we didn’t make a profit. Hurricane damaged home. My properties have declined 85% in value here in Florida so I’m broke.
Re: Bank didn’t close equity line after Sale - Posted by River City
Posted by River City on January 24, 2009 at 01:30:41:
My suggestion to him was to check his HUD-1 to see what was to have been paid from the closing proceeds. He didn’t say whether or not the purchasers obtained a loan or if they paid in cash. If they obtained a loan, the lender would have stipulated that the equity line be paid, if the lender knew about the equity line. I have done several loans where the seller of the property did not disclose a loan against the property because they knew the loan was not recorded. If the purchasers obtained a title policy, their title policy would also list those loans that had to be repaid. If the equity line does not appear in the title policy, chances are, the loan was not recorded at that time. This could be viewed as a form of fraud on the seller’s part if it was not disclosed to the closing agent because the seller signs a statement that says s/he is giving clear title to the property. Most contracts also contain that statement.
Bankruptcy - Posted by Rich-CA
Posted by Rich-CA on January 22, 2009 at 12:44:32:
No liking to suggest trying to walk away from a debt, but this sounds like the kind of situation bankruptcy was created to handle. You are likely personally on the hook for the loan, but I’m sure it would be a huge mess if the lender started to foreclose on the property.
On the other hand, was there Title Insurance at the time of sale? If so, then perhaps foreclosure is worthwhile and the Title Insurance would pick of the tab. Or maybe not. Just brainstorming here.
I think BK is your best bet.
Re: Bankruptcy - Posted by Brandon_FL
Posted by Brandon_FL on January 22, 2009 at 12:52:06:
The property is out of my name, how would they foreclosue? I don’t know if the new owners have title insurance. I’d assume so.
I have other loans still out. Would bankruptcy cancel all of them? I have other homes and properties.
Re: Bankruptcy - Posted by Rich-CA
Posted by Rich-CA on January 22, 2009 at 15:50:07:
The HELOC is secured by a specific property, whether your name is on the title or not. Unless the lien gets paid off, the security interest remain intact and the foreclosure action is against the property the lien is on.
Re: Bankruptcy - Posted by Brandon_FL
Posted by Brandon_FL on January 22, 2009 at 15:56:30:
Ok. So the bank will try to foreclose on the new owner which has been 3 years now? Should I hire an attorney?