Bellevue WA – After yesterday’s blog post, I am sure that some people were wondering why a Second Mortgage or HELOC gets zero from a foreclosure. Let me explain why.
Click here to discover how other sellers successfully did a short sale and avoided foreclosure.
When a property is foreclosed upon, it is auctioned on the courthouse steps.Let me give you a scenario where a homeowner owes the following on the property.
First Mortgage is owed $200,000.
Second Mortgage is owed $40,000.
There is a HELOC (Home Equity Line of Credit) that is owed $100,000. (The home increased in value to $400,000 and a lender agreed to grant the loan.)
So a total of $340,000 is owed on the property. Now, what if it only sells for $150,000 on the courthouse steps. Who gets that $150,000? Click here to find out.