Baltimore Sun
I am currently in default on my first mortgage for my condo. I bought a one-bedroom condo for $220,000 in 2005, and recently married and moved out of state. There's another unit in the building that was foreclosed on last October. It is listed for $89,000 and has not yet sold. What will the ramifications be if I choose to default on my home equity line of credit? I'm already taking the credit hit for the foreclosure. How much worse can it be?
I suppose the silver lining is that if you also default on your home equity line of credit, your credit history and score won't be much worse than they are right now.
The concern I have for you now is how you wind down your relationship with the lenders. You must make certain that your primary lender takes back the house as the sum total of what you owe. Once you do that, you will have to negotiate with the home equity lender to make sure that this debt is forgiven.
What you don't want is for these lenders, or the private mortgage insurance company that insured the top 20 percent of your loan to come after you several years from now demanding repayment. A real estate attorney should make sure that all of your loose ends are tied up.
Original source: http://creditscorenewsaggregator.wordpress.com/?p=47
