Foreclosure in Connecticut>Question Details

John, Other/Just Looking in Connecticut

we got a cancellation notice for our equity note for our home does this turn from a secured loan to a unsecure

Asked by John, Connecticut Fri Jan 23, 2009

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Please be wary of advice from those out of state. Connecticut is a recourse state, unlike California, and if a lender should foreclose on your home, you may very well be liable for any deficiency to the lender.

Please seek more information from your lender, and of course, seek any legal advice you may need from a reputable real estate attorney.
0 votes Thank Flag Link Sat Jan 24, 2009
Your HELOC may be eligible to be categorized as an unsecured debt if the value of your home is less than any portion owed on your HELOC. In other words, say you have a first trust deed for $250,000 and a second trust deed (HELOC) taken out after you purchased your home and originally took title to it for $100,000. The value of your home is estimated at $225,000. No portion of the HELOC could be repaid in the event of a foreclosure therefore it is an unsecured debt. Even though the lender has the right to foreclose pursuant to the terms of the promissory note, there would be no value in doing so.

However, you must check with your state's statute regarding deficiency judgments on purchase and non-purchase money loans. It appears as though your state has very strict guidelines as to your rights with regards to debts and how they are categorized. Your lender may be able to provide you with the information you are requesting but I would check with an attorney to verify that the information provided by your lender is accurate. Hope that helped a little bit.

Diane Wheatley, Broker
0 votes Thank Flag Link Sat Jan 24, 2009
Minna is right! most probably you got the suspended letter that means you cannot get anything from that account but have to pay your monthly dues if there's any.
0 votes Thank Flag Link Fri Jan 23, 2009
Best to consult with lender, did you not pay the monthly note amount for equity? If equity line of credit there is still MOST LIKELY a lien on property need to check provider of loan and county tax records.
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0 votes Thank Flag Link Fri Jan 23, 2009
I'm not sure I fully understand your question, but it sounds as though you have a second mortgage/Home Equity line of credit on your home, and the lender has closed this account. If that is the case (which is becoming more common due to declining home values) then you do still owe any balance on the note, but you are no longer able to access any additional equity.

For more information, contact the lender directly. If you cannot get a satisfactory answer from the lender directly, then I would recommend you speak with a real estate attorney.
0 votes Thank Flag Link Fri Jan 23, 2009
Not likely. i assume you mean they suspended your use of the equity line. Whatever you owe on it is still secured by your home. If you owe nothing, you're scott free. If you owe, and dont pay they'll still come after your house. If you're not in a position to pay it may be time to consider your other options - refi, short...etc.
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0 votes Thank Flag Link Fri Jan 23, 2009
Your best bet is to call the lender and ask what the ramifications of the change are. Nobody else knows what the fine print on the note says. They are the only ones that can give you an accurate answer.
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0 votes Thank Flag Link Fri Jan 23, 2009
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