A friend of mine is successor trustee of a trust with ver a nice home. The trustee (his mother) passed away. We found that the home was paid off however, his mother took out a line of credit using the house as a collateral. She was a heavy gambler and evedently the line of credit was never paid off before she passed. It's been since 2012 that the line of credit hasn't been paid at all.
I was wondering. Does this type LOC work the same as mortgage....will Bank of America forclose? Someone told me that ey they would just tag a lien to the property. My friend wants to keep the house but B of A wants 25k upfront to bring loan current. Should we worry about bank taking the house?
sorry for the errors and typos... Posting on my phone . :)
Without many details, if the LOC was secured by the home, the bank could foreclose. Your friends options depend on the details like balance on the LOC, market value of the home, how far behind on payments and your friends ability to bring the line current. Will the bank foreclose? I would start working with the bank right away to prevent that. Good luck!
having worked for BOA I can say that you should definitely worry about them taking the house. its a loan secured by the property. depending on the value of the home and your credit you may be able to get a new home equity and just pay that one off...
if credit and qualifying is an issue, and you need a quick fix, most hard money lenders will do a bailout for them. Some portfolio lenders will as well.
Thanks for the replies... The balance on the LOC is 100k. House is worth 250k. Do you think B of A would readjust the LOC since original owner passed away? Can we settle for less on new terms?
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing