Minnesota is a state with non-recourse laws BUT will I be protected from debt repayment of Home Equity Line of Credit when my home forecloses?

Asked by MN/FL HOMEOWNER, Andover, MN Fri May 13, 2011

I have consulted with at least 5 real estate attorneys and no one actually knows the answer. HOWEVER, they all told me to be reluctant in giving the lender of the HELOC any financial information about myself. They say that the info could be used against me. I would like to add that I am 62 - always had A-1 credit - but cannot do a short sale or modification cause all I have is meager Social Security earnings.

Where can I get a correct answer to my question?

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Eli Givoni-S…, , Boca Raton, FL
Mon May 16, 2011
You can do a short sale. It is a far better option that foreclosure. A short sale will not only keep foreclosure off your credit, but in addition, we will address the liens, including the HELOC. So, you will know exactly what the lender of the HELOC will expect from you, if anything, after closing.

Please call directly to discuss your specific situation. Our services are FREE to homeowners.

Eli Givoni, Director
Short Sale Department, LLC
Serving all 50 states

MARS Disclosure for General Commercial Communications
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
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Christopher…, Agent, Bloomington, MN
Fri May 13, 2011
yup that is a good one Chelsea
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Vivian Backm…, , Maple Grove, MN
Fri May 13, 2011
Google Mortgage debt relief. You will find alot of good information. Look at both IRS and state laws. They will differ state to state too.

The only way you will be able to get through this process is by providing information to the banks. They will not release you from your obliagation without it. Your best bet is to do a short sale and go through the process because then you will know what you are up against. If you dont and you just walk away from the house you will not know what they are going to come after you and chances are, for more than you would have had to settle for. I have helped many people get the HELOC completely waived and settled. If you have questions or want to sit down visit I am can talk. You can call me if you need to ask more specific questions. I am a Realtor Senior Advisor and have helped many of my 55+ clients through this confusing maze. Some banks are NOT fun to deal with : (
Vivian Sylvester
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Chelsea Knut…, Agent, Maple Grove, MN
Fri May 13, 2011
I would be happy to put you in touch with an experienced real estate attorney, one that can give you the answers you need. I have some great referrals for you to speak with, you may contact me if you would like their information. If not, here is a link that may give you more information about Minnesota's foreclosure statutes, https://www.revisor.mn.gov/statutes/?id=582.30&year=2010

Also, I am a Certified Distressed Property Expert and saw that you said that you cannot do a short sale due to your meager social security earnings - a short sale is very different from a loan modification and in many cases, will not damage one's credit as much as a foreclosure. I would be happy to discuss your options with you as long as you are not currently represented by another Realtor.

Thank you for your time and please feel free to contact me,
Chelsea K, Realtor
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Christopher…, Agent, Bloomington, MN
Fri May 13, 2011
Well now that is interesting 5 real estate attorneys don't know what they are talking about:(

The simple answer is no in general . HELOC's are about as week as they come and the easiest to negotiate in my world, but they do not follow the Non-recourse laws that govern the 1st lien position.


That is one way to go about it. YES there are some unique circumstances and I hardly ever see them come up, but that web link will explain it, or else I can answer it personally. I also co-authored a book that talks about the subject.

By the way you might not be able to do a loan modification but you can certainly do a short sale. Check out Fannie Mae's website http://knowyouroptions.com/

Ever since this website came live I have referred to it time and time again. Your social security earnings mean nothing you don't pay me a dime to help you. And quite honestly if you have a true hardship you probably won't have to pay your lenders anything either.

I don't know much about your situation, but considering your financial circumstances a short sale could be your best option at this point. Best to talk to me directly if you would like more information on that.

I am sure someone will badger me for giving "legal" advice, which usually happens. Just so you know, I specialize in this area and have negotiated with enough banks to know what I am talking about. You can't effectively negotiate with lenders if you don't even know what is or is not part of MN's non-foreclosure laws now can you!?

I don't consider this legal advice since it should be put in Short Sale negotiation territory but hey YOU CAN CONTACT ME DIRECTLY AND TALK TO MY REAL ESTATE ATTORNEY if you want.

Sorry you had to spend so much time on this question pretty easy to answer!

0 votes
Cameron Piper, Agent, Forest Lake, MN
Fri May 13, 2011

Steve is one of the early adapters to the foreclosure/short sale game having done this for at least a decade and not just the last couple of years. Your situation is fact dependent, but that HELOC will likely have the right to come after you for the difference. The fact that you earn a meager social security benefit makes you the perfect candidate for a short sale. I negotiate my own short sale listings as well as short sales for other top producing agents. If you would like to give me a call at 612-839-4202, I would be happy to give you my assessment.

Cameron Piper
Coldwell Banker Burnet
licensed in MN
Web Reference:  http://www.campiper.com
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