Home Equity Loan

Question about equity line and foreclosure in MN?

My wife still owns a townhome from before we were married and she had later taken out an equity line of credit from a different bank. If the house goes into forclosure what would happen with the line of credit from the other bank that is attached to the home? This is in the state of MN. Thank you in advanced for the assistance.

Public Comments

1. I doubt that equity lines are regarded in different ways in different states as they are simply a second mortgage on your house. Therefore, the bank, although second in line after your first lender, has a lien on your property. When the property is SOLD by your first lender, your first lender will be paid first and the HELOC lender will be paid second. If there is anything left from the sale, the first mortgage holder will get that money as profit. Your wife will get nothing.
2. You have a number options available to you to avoid foreclosure or at least hold it off until the market improves. Your choices are; to rent it out until market turns. Or put it on the market now. Most lenders won't work with you until you've missed at least 3 payments. After 90 days the doors begin to open with most lenders. Some will tell you they would entertain a short sale, some may say they will take the deed in lieu of foreclosure. So all is not lost. If you would like more information I might be able to help you. I am a Realtor in the TC area and would be glad to chat with you about other avenues for you. Send me an email with phone number and I'd be glad to call you.
3. To best answer you questions on foreclosure or need help finding the right options check out this website. I highly recommend it. http://www.shortsalecomplete.com/?utm_source=blog&utm_medium=blog&utm_campaign=shortsalecomplete