We unwillingly had to foreclose on our house five states away. We had a home equity loan that we were told would be included in the foreclosure. Now the bank is calling us a year later asking us to settle. What’s going on?
As I understand your question, your home was foreclosed. This is a process where a lender exercises their right to have a loan repaid which is in default. The default is usually past due payments. The house is "sold" and the funds from the sale go to pay the loan back. While state laws can vary, in most cases if there is still money owed after the sale, you still have that obligation. This is especially so if there is a second, third or fourth lien on the property. Commonly there isn't enough money after the sale and expenses to pay the first lien, much less those following it. A word of caution here; if the lender forgives this debt, which means you don't have to pay them, it may be reported as income to the IRS and is taxable.
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As I understand your question, your home was foreclosed. This is a process where a lender exercises their right to have a loan repaid which is in default. The default is usually past due payments. The house is "sold" and the funds from the sale go to pay the loan back. While state laws can vary, in most cases if there is still money owed after the sale, you still have that obligation. This is especially so if there is a second, third or fourth lien on the property. Commonly there isn't enough money after the sale and expenses to pay the first lien, much less those following it. A word of caution here; if the lender forgives this debt, which means you don't have to pay them, it may be reported as income to the 