Re: What happens to a home equity loan on a house that foreclose

Posted by NJD on November 26, 2008 at 11:06:21:

In Reply to: What happens to a home equity loan on a house that foreclose posted by Gin on November 25, 2008 at 15:57:12:

The answer depends on 1)how much is owed on both the first and second, and 2) what the home sells for at foreclosure auction.

If you owe more on the home than its worth, and proceeds from the foreclosure sale are not enough to satisfy the first mortgage and costs of sale, and the junior lien (home equity second), the junior lien
will be extinguished by the first's foreclosure.

In most cases, though, even if the mortgage has been extinguished, the borrower still remains personally liable to pay.

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