Equity Loan Information
What are all of the consequences on defaulting on home mortgage, HELOC, and HOA Fee (all same property)?
- How likely is it for them to come after you with legal action and take other assets? - Would it mean someone who does the above will have to also declare bankrupcy? - What happens with the balance owed (especially with HELOC) if he/she does not ever repay it? Do they keep trying to collect it from you for rest of your life? - If any of them go into collection agency, what could/would they do? - All relate to same property - Both short term and long term consequenses. - In Arizona.
Public Comments
- It depends on the lender. Basically, what you are talking about worse case would be a deficiency judgement. When a lender is forced to take back a property the lender has the right to go after you for the loss. So if it sells for 100K but you owe a total of 130K then you would owe the lender 30K. As long as you did not lose your job you will probaly be forced to sign a promissory note. Basically stating that you will repay them them X over a period of 7 years. You can only declare BK if your wages can not support your liabilities and even then I think that you have to repay your Bk debt. All in all try not to let a property go. If you can make the payments keep them up. If you can not then talk to the lender and let them know you are trying. They will be less likely to go after you if they know your case.
- If you live in Arizona and have the original loan you used to purchase your personal residence, the bank can take the house and nothing else. If you refinanced or added a 2nd mortgage, the law treats you differently.The bank can take the house and come after you for any loss. The banks never did this because it took 18 months in court and they never collected any money. But they have the legal right to go after you. The long term consequence is a judgement that forces you to pay 22% interest every time you buy a car. Or you could get lucky and owe nothing and live happily ever after..
