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Home Equity line of Credit (HELOC)

A home equity line of credit (HELOC) is a loan in which the lender agrees to lend a maximum amount within an agreed period of time; the collateral is the borrower's equity in his/her house.

What legal argument/loop hole that someone can use regarding a loan if they want to enforce that was due in 2006 and it is not covered by an agreement/signature.

An argument of laches may apply to this particular case. The doctrine of latches is a common law defense used to prevent a plaintiff from taking a position in court based upon the time that has expired from when the action occurred to when the action is actually filed. The plaintiff is done when that time lapse would be unfair to the party who relied on the original position.

We have an equity line of credit home loan with a bank in CA, we did stop paying the bank, but we are current and on time with payments, can they do a foreclosure or what kind of legal action they can take?

The person does have liability for this particular equity loan because it does not fall within the CA non-deficiency statute. Foreclosure may not be the issue at hand. Foreclosure works in the situation as if the second lien holder were to foreclose; all proceeds from any foreclosure sale go first to pay the first lien holder in full before the second lien holder gets any of the money. If the house value is less than what is owed on the first loan, the second lien holder is not going to spend the time and effort to foreclose on a loan from which the second lien holder will not get any money.

We have an equity line of credit on our home. If the bank forecloses on our first mortgage, are we liable for the line of credit? We live in California.

CA does have a non-deficiency statute that would prevent a person from being liable on any loans used for the purchase of their home. But, this statute does not extend to home equity loans where the proceeds are used for other reasons. The person does have liability for any deficiency on this loan. Whether or not they will depends upon their assessment of the collectability of a deficiency judgment. So, if the person can convince them that the person being charged has nothing for them to get, and that if they were to pursue a judgment, that person would simply file for bankruptcy protection and get the judgment discharged-and even if they have no intention of doing so, it is still good leverage with the bank because they do not know that the person will not do so then it is unlikely the lender will spend the time and money necessary to get a judgment they believe is uncollectible in the end.

Is home equity line of credit partly or fully dischargeable?

It may be fully dischargeable. It’s all pending on particular facts and circumstances. Also, there are some debts that may not be dischargeable which include: divorce settlements, child support obligations, crime reparations, and taxes.

Is it legal to have two different lines of credit on one house?

A Home owner can have as many lines of credits as they want and banks are willing to establish. As long as the home owner did not participate in any kind of fraud or misrepresentations to the bank, the homeowner is not responsible to close prior lines of credit, unless the homeowner agreed to do so in writing or the written agreement of the previous or current credit line requires him to do so.

Having the right information about home equity line of credit can help individuals deal with difficult situations and make the right decisions. Ask Experts about equity line of credit and other related topics.
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Recent HELOC Questions

  • hello. A bit of background info: Im in WA state, which allows

    hello. A bit of background info: Im in WA state, which allows for either Judicial or Non-judicial foreclosures. I purchased my home in 2000, and it is my primary (and only) residence. The home was financed with 100% purchased money (i.e.; no money down). No PMI was required by BofA because they did an 80/20 Loan (my "1st & 2nd"). I have never refinanced or taken any HELOC on the property. Both the 1st and 2nd are secured via a "Note" and a Deed of Trust that gives the Lender the "power of sale". I have never missed, or been late with a payment.
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