Stockton CA – After yesterday’s blog post, I am sure that some people were wondering why a HELOC gets zero from a foreclosure. Let me explain why.
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When a property is foreclosed upon, it is auctioned on the courthouse steps.
Let me give you a scenario where a homeowner owes the following on the property.
First Mortgage is owed $200,000.
Second Mortgage is owed $40,000.
There is a
HELOC (Home Equity Line of Credit) that is owed $100,000. (The home increased in value to $400,000 and a lender agreed to grant the loan.)
So
a total of $340,000 is owed on the property. Now, what if it only sells for $150,000 on the courthouse steps.
Who gets that $150,000?
The first mortgage does. The second mortgage wouldn’t get a dime unless the property sold on the courthouse steps for more than $200,000. The HELOC wouldn’t get any money unless it sold for more than $240,000.
This is why a second mortgage gets so little money from a foreclosure. Historically, second mortgages were loaned for the top 20% of the property value. The lower 80% was the first mortgage.
In most cases, the attorney fees, foreclosure costs, delinquent property taxes, and other fees would bring the first mortgage’s total up to around 100% of the property value.
This is why in most cases a second mortgage rarely gets any money from a foreclosure. Of course there are other variables that can change things, but this is how it usually works.
Thinking about a loan modification?Our Stockton loan modification kit will show you how to reduce your mortgage payment, keep your home, and get back on your feet. Send me an e-mail at
ron@homebuyersrealty.com to request a Free Copy. Or,
click here to request a copy.
Thinking about a short sale? I can help you short sale your property so you can move on with your life. Send me an e-mail at
ron@homebuyersrealty.com. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (209) 321-0445
Discover how other sellers successfully completed a short sale and request a free consultation by
clicking here.
Thanks for reading this, Ron Cedillo.
Ron is a Real Estate Broker at Home Buyers Realty. Stockton Short Sales Realtor:
Phone: (209) 321-0445.
ron@homebuyersrealty.com.
Providing Options for Homeowners in Foreclosure
View My homes for sale at
www.HomeBuyersRealty.com.
Ron Cedillo specializes in loan modification assistance and short sales in Stockton California. Stockton Loan Modification Help, Stockton Short Sales. Stockton Short Sale Realtor Stockton CA Short Sales. Stockton Realtor.
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Important Notice
Ron Cedillo, Home Buyers Realty, and the Stop Foreclosure Institute are not associated or affiliated in any way, shape, or form with the government. Our services have not been reviewed, endorsed, or approved by the government or your lender. Most lenders willingly work with agents on short sales. Why?
Because most short sales are beneficial to a lender. If you accept our offer to help you on a short sale, your lender may not agree to a short sale or to modify your loan. We do offer a loan modification kit.
However, the likelihood of negotiating a modification is like everything else in life. It takes work and persistence to convince your lender to modify your loan. No matter what you or we do, your lender may not approve a loan modification.
If you stop paying your mortgage, then you could lose your home and damage your credit. Because we know avoiding foreclosure is so important to any homeowner, we recommend that you speak with the appropriate legal or tax advisor before making any decision.
This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.
You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale.
The views expressed here are Cedillo's personal views and do not reflect the views of Home Buyers Realty.
This information on Stockton Short Sale: Why Does A HELOC Get Zero From Foreclosure is provided as a courtesy to our viewers to help them make informed decisions.
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