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honey5 · Oct 15, 2009, 05:19 PM

if I can't pay my home equity loan, what happens, does it turn into a lean against my house or can they actually forclose on my house

LisaB4657 · Oct 15, 2009, 05:21 PM

A home equity loan is actually a second mortgage on your home. It became a lien on your house the minute you signed the papers. If you don't make the payments they can foreclose.

honey5 · Oct 16, 2009, 10:48 AM

Originally Posted by LisaB4657

A home equity loan is actually a second mortgage on your home. It became a lien on your house the minute you signed the papers. If you don't make the payments they can foreclose.

So even though the loan is only 17000 and my house is worth 130,000 the house would go under foreclosure? The house is a Fannie May or Fha home, does that make a difference, I am paying it though a bit behind, just wanting to know and I really appreciate you helping me. Thank you

LisaB4657 · Oct 16, 2009, 11:18 AM

Sorry but yes, it would still go to foreclosure.

honey5 · Oct 19, 2009, 05:00 PM

Originally Posted by LisaB4657

Sorry but yes, it would still go to foreclosure.

Is there such a thing as a line of credit home equity loan? I think that is the one I have. Thank you so much for you r help

ballengerb1 · Oct 19, 2009, 05:05 PM

Home equity line of credit is a version of a second mortgage but you do not take the money all up front. It's a bit like a big check book where the bank gives you a line of credit, usually at a much better rate than your original mortgage. I can't tell you to stiff other creditors but mortgage and HELOC are two types of loans you need to keep up with.

LisaB4657 · Oct 19, 2009, 06:15 PM

Yes, the home equity line of credit is also a second mortgage. You get approved for a maximum amount and you sign a second mortgage for that amount. Even if you don't take the full amount that they approved there is still a second mortgage. If you fall behind on any of the payments they can declare that you are in default and then start foreclosure proceedings.

nikosmom · Oct 19, 2009, 06:30 PM

I'll chime in with my 2 cents as well... the consequences are the same for defaulting on anything when your home is used for collateral. I'm sure you don't want to lose your home over $17,000. Plus, since it's such a major loan, you'll ruin your chances of getting another one any time soon.

honey5 · Oct 20, 2009, 03:52 PM

Is bankruptsy out of the question for this also, sorry if I misspelled

honey5 · Oct 20, 2009, 03:53 PM

Originally Posted by honey5

is bankruptsy out of the question for this also, sorry if i mispelled

Thank you everybody for all your help. Very much appreciated

LisaB4657 · Oct 20, 2009, 04:38 PM

It's not out of the question but there are a lot of options you can explore before you take a step like that. You can look into the possibility of getting a loan modification to lower your payments or refinancing your first mortgage to pay off the second.