In New Jersey, is a second mortgage, purchase money HELOC a recourse loan?

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Someone told me that Virginia is a non-recourse state which means that bank can’t go after my assests should I default on my mortagage. But now I am hearing completely something different from another source. Which is one is the true statement?

  1. Reply
    January 28, 2011 at 8:58 am

    well, I am not exactly sure what you mean by a recourse loan. But I think you are talking about the recourse clause in a HELOC where you need to complete certain types of work to access the full funds from the HELOC. I.E. construction loans that are HELOC terms. HELOC terms are standard revolving credit, like a credit card with no fixed payback schedule

  2. Reply
    January 28, 2011 at 9:22 am

    The vast majority of HELOCs are recourse loans because they are secured by real estate. Read your paperwork.

  3. Reply
    Expert Realtor
    January 28, 2011 at 10:08 am

    It is NOT.

    So yes, if your foreclosure sale fails to pay off your mortgage, then they can sue you for the difference.

    I personally, don’t see anything wrong with a bank doing that.

  4. Reply
    January 28, 2011 at 11:07 am

    Virginia is not only NOT non-recourse, it isn’t even one action. They can sue you multiple times.

    You will not be able to keep the banks money in Virginia, you need to give it back.

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