What if you default on a home equity line of credit?
If your first trust forecloses on the property and you default on the HELOC, the bank holding the equity line may and probably will sue you for the money. In many states they are able to do so and possibly gain access to your other assets. Now, most people who are foreclosed on do not have the money to pay the mortage back, let alone any equity lines. With all of the proposed housing bailout throught the govt., what about the people who have already lost their home and had outstanding loan balances on the property that they no longer own. I am curious to see what will happen to many people with HELOCS that have no ability to repay them. It is just sad that homeowners were solicited time after time by lenders to tap their equity and how easy it was to give them the loan, they were almost asking for borrowers to dig their own grave. We really even now have no idea how bad this housing market is and will affect us as a country.
