Home Equity Line of Credit – HELOC?
We have clients that have a 1st & 2nd loans on their mortgage, 2nd being a HELOC. The value of their house dropped and they owe more than what the property is worth. What happens to the HELOC? If the property is foreclosed, does the lender for the heloc come after the clients and still collect payment for it. If the property was placed on short-sale, what will happen? Will they get 1099C from the 2nd lender? How is the 1099C based on? Is it based on the difference of how much it was sold for versus the amount owed?