Tuesday, October 18, 2011

Can Second Lender Foreclose After Bankruptcy?

The HELOC lenders are unlikely to foreclose in the foreseeable future. In order to get paid, the property value must increase substantially because the first mortgage will always have priority. The HELOC lenders would have to foreclose and use the proceeds from the sale to pay off the first mortgage prior to receiving anything. Because there would be nothing left after paying the first mortgage, the junior lenders are not going to foreclose. It is bad business.

Read the rest of the article at Fox News

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