We have two mortgages (primary & HELOC) that were included in our CH7. Both mortgages were NOT reaffirmed. We have been making 100% timely payments on the primary mortgage, but the HELOC is completely underwater and hasn't been paid since before the BK. If were were to sell the property for enough to cover the primary mortgage (or perhaps a short?), does the HELOC have any standing in blocking the sale?
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Yes.
Now, if the buyer were paying cash willing to buy the property "subject" to the HELOC, which no one will, then it doesn't matter. Outside that super rare, never going to happen scenario, yes, the HELOC still has a valid lien and they have to "agree" to release the lien to allow the sale to go through (the buyers lender will require and the title company will require it).
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