Recourse of HELOC in California?
I am selling my home in California, which should have plenty of equity even after a very steep price decline. I am current on all my loans, and my intention is to make good on all my debts. However, I would like to know, in the case of a truly catastrophic decline over the coming months is there any recourse to other assets that I have (savings, IRA, etc.)?
I was given this HELOC as part of the original mortgage loan package, though it is from a different lender.
To clarify... if no equity is left then I do not intend on offering other assets to the HELOC lender. IMO, the lender took the risk on the value of the asset that backed the loan and that is why they are charging fees and interest.
So the question really is... in this situation can the HELOC lender have recourse to and pursue other assets besides the house?
- LandlordLv 71 decade agoFavorite Answer
Yes, the HELOC is full recourse, there is no such thing as a no recourse HELOC.
- golferwhoworksLv 71 decade ago
of course there is. If you have to sell short of pay off then it is up to you to bring cash to the table to deliver good deed. If that is what you are asking. No they will just sue you for the balance owed and get a judgment and then if need be garnish your wages, send you a 1099 for the balance and you will pay taxes on that to the IRS. In other words the balance just is not forgiven as they would have to approve the short sale Pryor to close. You just cannot close on a home and leave an open lien without some recourse