questions & answers

Question: We currently have a mortgage on our home as well as a home equity line of credit. If the first mortgage company forecloses on our property, can the bank that we have a home equity line of credit sue us or file a judgement on us for the amount of the home equity line of credit we used?

Answer: They can't get a judgment against you without filing a lawsuit first. However, if the first mortgage company forecloses on the property, and there is no money left from that foreclosure sale to pay off the home equity line of credit, then the bank that has the home equity line of credit can sue you for the line of credit that you have used. Think of the home equity line as a simple contract; you agreed to pay to that bank the amount of money you borrowed from them. If you don't, they can sue to recover on that contract.