Asked and answered… Thanks
I doubt that you are going to be able to get a valid answer here. You need to talk to a lawyer. This question is outside the completely outside the scope of real estate investing.
There is a difference between an equity line of credit and an equity loan. A home equity line of credit is like a credit card – a certain amount of money is available to you to use should you need it. When you actually need the money and tap your home equity credit line, you have taken out a home equity loan with your personal residence pledged as collateral.
Just having your loan marked “paid” does not necessarily close your credit line. It remains open and your full borrowing capacity under the line is once again available for your future use.
If you have an issue to resolve with your equity lender, only your attorney should be answering this question for you in the context of your state’s mortgage lending laws and lender liability laws. Give your attorney all your written communications with the lender, your original loan documents, and any other written documents that are related to your issue, then come back and tell us the outcome.
I plan to discuss with attorney if I have to, but if what you are saying is correct (and I agree) when the lender willfully surrendered the collateral due to sale of same, any credit funded after that day in absence of new collateral asignment must be deamed unsecured credit card debt and collected if need be also reported to credit reporting agency as such.
That’s going to be my position when collection comes calling. I can work with that and maybe satisfy this
with a reduced settlement and minimize neg. reporting.