On which of the properties are you facing foreclosure? One (which one) or both?
What are the natures of the loans and amounts? Primary purchase loans? Refi’s of primary and existing HELOCs?
First property: Is the 5/1 I/O ARM the initial financing on the house, or a refi? How was the refi on the first HELOC done to get home #2?
Second Property: is the negam the orignal purchase loan?
From first sniff, it looks like you may have to deal with credit agencies or 1099s (depending upon how the banks feel) with the HELOCs. These are recourse loans (That means the banks can go after you for some ‘skin’. if the banks don’t think you have any skin they can get, they can 1099 you for loan forgiveness.. the amount of which is considered income and is taxible. The banks do this so they can write the loss off on their income taxes.)
Now about the primary loans. I assume these properties are in CA (which is important). Last time I heard, primary purchase loans are non-recourse (bank has to eat the loss and can’t pursue or 1099 you). If the primary loan is a refi, it is now a recourse loan. (Moral: Don’t equity out refi just to get money.. have a good, safe long term plan because you are sacrificing financial protection in the process. Speculating on the housing market does not qualify as safe.).
