- This topic has 1 reply, 2 voices, and was last updated 9 years, 9 months ago by Anonymous.
- May 5, 2011 at 2:30 pm #204925AnonymousInactive
We have 2 mortgages (1st & 2nd), my friend withdrew an other line of equity. What happens to the equity line loan if we sell this house short? Can we ask the bank to convert equity loan to personal loan and we continue to pay for it?
Sorry that I was not clear in the question. Basically, on this house, we have 3 loans: 1st mortgage with mortgage company A, 2nd mortgage with mortgage company B (we used 100% financing when bought this house), and the equity loan with a bank (3rd loan that my friend’ sister took out to do something else.)
Now we have problem with the first loan since it is ARM (we didn’t know when signing paper). The rate is reset, we start having problem to pay for it. We want to short sell the house, but not sure what to do with the 3rd loan: the equity loan. For the 1st / 2nd, we may have to pay the tax if the banks agree to let us short-sell the house and issue the 1099-C, but because the third loan (equity loan) is from another bank we are not sure if this bank agrees to release for us to sell the house or willing to renegotiate the loan for us to pay as personal loan.
- May 13, 2011 at 3:11 am #274767AnonymousInactive
Second mortgage (home equity) comes last. Whenever the house is paid off or sold, your first mortgage balance will be paid first and home equity loan afterwards. When you sell a home with a mortgage balance on it, the new buyer pays off your loan with his mortgage.
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