Foreclosure in 85233>Question Details

Patento, Home Owner in 85233

Stop HELOC Payments, Continue Paying 1st...

Asked by Patento, 85233 Thu Jul 28, 2011

We have 1st (450K) and 2nd HELOC (100K) from the same bank-GMAC - on our home in AZ.
We are considering to stop payments on the HELOC but continue servicing the 1st loan.
This is our primary and only home, so we want to keep it at any rate i.e foreclosure and\or short sale are not an option for us.We filed for Chapter 7 last year , credit score is now around 500 , so the consequences of hitting the credit score further in not an issue...
The value of the house now is lower (around 400K) than the 1st.We tried to negotiate with GMAC, the bank basically said - No chance, you are making enough money -both my wife and I are employed.
My question is what will happen if we stop paying just the HELOC ? I hear the bank will transfer the loan to a collection agency for them to try and collect. What are our chances to negotiate the HELOC with such an agency? Will they also determine that we are not eligible, since we both make enough money to continue to pay?
Thank you for your advice

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Answers

2
Being a HELOC the bank is going to want their money. The bank will foreclose your second if you stop paying and if you have a bank account with them they will automatically withdraw the money from your account.
0 votes Thank Flag Link Thu Jul 28, 2011
You do know that if both koans are with the same bank, the bank will default the primary on the fact that you jeopardize that loan with none payment of the secondary. Either bank or loan can set off a default sequence! So the secondary go to the court and says I want to default on the home owner due to none payment, the Court says notify the primary lender and then we will start foreclosure! So I can only tell you is this find a way to meet both payments because either default will put you in foreclosure!
0 votes Thank Flag Link Thu Jul 28, 2011
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