Full question:
I recently bought a home and moved out of our prior home. I have not sold the prior home yet and have money owing on a home equity line of credit. If the home is voluntarily forclosed OR involuntarily forclosed, will I be vulnerable to a deficiency judgement or any other financial liabilities if the home is sold for less than is owing on the home equity line of credit?
- Category: Real Property
- Subcategory: Foreclosure
- Date:
- State: Washington
Answer:
The equity you have in the home is the collateral and security for the loan you were given by the bank (the mortgage holder). If the home sells for an amount whereby you do not recover enough equity to repay the loan, (or recover no equity at all), then yes, you will be on the hook to repay the home equity loan through other assets. It would be very surprising if the contract allowed you to get out of paying back the loan due to a low sale price.
Links to resources and reputable assistance in Washington are here:
http://www.dfi.wa.gov/consumers/homeownership/foreclosure_assistance_programs.htm
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
