Can a bank foreclosure and give me a deficiency judgement on a home equity line of credit loan? 8 Answers as of May 08, 2013

Can a bank foreclosure and give me a deficiency judgement on a home equity line of credit loan? The money was used in a business that went bankrupt in 2009. I reported it in the internal revenue services in 2011. Can they legally take my grand parents by force?

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Janke Legal Consulting | Bruce C. Janke
If the HELOC contract states that it is a recourse loan, then yes the lender can sue you in court and obtain a money judgment for the difference between the auction price and the loan balance ("deficiency"). A non-recourse loan means that the lender's remedy is limited to taking back the property regardless of the loan balance. Since the purpose of the loan was for a business and not related to the property, then I expect it is a recourse loan. I have no idea what you mean by taking your grandparents by force.
Answer Applies to: California
Replied: 5/8/2013
Durham Jones & Pinegar | Erven Nelson
Generally speaking, a lender can seek all of the money it is owed under a promissory note. It does not matter what the money was used for. You should hire a lawyer to negotiate with the bank and look for counterclaims against it.
Answer Applies to: Nevada
Replied: 4/23/2013
Richard L. Hirsh, P.C. | Richard L. Hirsh
Not sure why you are mentioning grand parents but otherwise, yes, the bank can take a deficiency on a home equity line of credit regardless of what the purpose of the loan was.
Answer Applies to: Illinois
Replied: 4/23/2013
Frank Law Group, P.C.
Frank Law Group, P.C. | David E. Frank
In California, the lender can only do that by way of a judicial foreclosure, unless there was a senior loan which foreclosed first. If that happened, yes, the equity lender can sue you personally after the senior lender forecloses.
Answer Applies to: California
Replied: 4/22/2013
Stacy Joel Safion, Esq.
Stacy Joel Safion, Esq. | Stacy Joel Safion
The bank can pursue you on a equity line after your foreclosure.
Answer Applies to: California
Replied: 4/22/2013
    Danville Law Group | Scott Jordan
    I am not clear on what you are asking. Is the HELOC company foreclosing on the property?
    Answer Applies to: California
    Replied: 4/22/2013
    Law Office of D.L. Drain, P.A.
    Law Office of D.L. Drain, P.A. | Diane L. Drain
    It depends on the exemption laws of the state where you live. Each state has a list of exemptions, which is property that is protected from creditors. Exemptions differ dramatically state to state. You can also talk to a good bankruptcy attorney in order to determine your rights.
    Answer Applies to: Arizona
    Replied: 4/22/2013
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    If the home equity line secured real property then yes, they can foreclose but if you received your bankruptcy discharge then they can not go after a deficiency judgment.
    Answer Applies to: New York
    Replied: 4/22/2013
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