Missed Payment due THREE days ago on HELOC with USAA and they just called!!!

[yeahwhatever]

Ok really! We just paid our retainer last week. Feb 1st was literally the 1st payment missed, or ever paid late, with USAA and they called me on the HELOC at 8:10am! They have both the mortgage and HELOC. I pushed her off by saying hubby has been out of work for 6 out of the last 12 months which is true, but did not tell her he actually started a new job today. Doesn't matter anyway since that job pays 60% less than prior job so we still can't afford everything. She said they can call as soon as next week since I haven't 'set up' anything with them....

We are letting the house go and we are in FL. Our intention was to stall as long as possible since we have some income we are waiting to drop off in the look back period. Anyone have any experience with a HELOC actually forcing a foreclosure before the 1st mortgage? And if so, can that be dragged out like a regular foreclosure? I'm so confused! We haven't been able to save anything yet and I don't want to be forced out of my home in just a few months

Thanks

[Charlie777]

Generally a HELOC won't force a foreclosure because they don't get anything unless the first mortgage is paid in full, and they probably have to buy the first lien holder out in order to be able to foreclose. But this sounds like USAA is both the first mortgage holder and has the HELOC, I'm not sure whether USAA can declare the first in default for failing to pay on the HELOC, or they would be willing to foreclose the HELOC since the proceeds of sale go to their first mortgage with any excess going to their HELOC. Having both liens held by the same lender isn't unheard of but I just don't know the extra wrinkles.

[yeahwhatever]

Thanks for the response. I should have mentioned that the mortg balance is about 85k and the HELOC balance is about 105k and the home is only worth about 80k right now

[LadyInTheRed]

If you don't pay on the second, they can foreclose on the second. The first mortgage gets paid first which means they won't get anything on the second. A 2nd lienholder who is not also the 1st lienholder wouldn't bother to foreclose because they wouldnt' get anything out of it. But, if they hold both mortgages, they may (and can) go ahead with foreclosure.

Just because they are calling you does not mean they are immediately going to start foreclosure. But, if and when they do foreclose, you can draw it out to the same extent you could a foreclosure on the 1st. The foreclosure process is the same regardless of what position the foreclosing party is in.

[yeahwhatever]

Ok thank you! That helps.