If my house just got sold at auction, do I still have to pay my home equity line of credit from a different bank?

Get Legal Help Today

secured lock Secured with SHA-256 Encryption

If my house just got sold at auction, do I still have to pay my home equity line of credit from a different bank?

I’m wondering what will happen if I don’t pay my home equity line now that my house has forclosed. The line is through a lender who I have a credit car withd and do my banking.

Asked on August 14, 2011 California

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you lost your home at a trustee's sale where the first trust deed foreclosed upon the security for your loan (your home) and you home equity line of credit was in a second secured position by your home, its secured position was wiped out as a matter of law by the foreclosure of the senior lien.

You are obligated to pay off your your home equity line of credit that was in a second secured position on your home assuming it was not part of the purchase of your home (purchase money). From what you have written, it does not seem to have been part of the intial loan process when your home was acquired.

If you do not pay on your line of credit, the lender can file suit against you, possibly obtain a judgment against you and then start levying on your assets to satisfy its judgment against you assuming one is obtained.

You should consult with a real estate attorney about the effect of the foreclosure of the first trust deed (mortgage) and your obligation under the home equity line of credit that was secured by your home.

Good luck.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption