A home equity line of credit, or HELOC, is a loan taken after buying a home that lets the homeowner borrow against equity for expenses like cars, credit card debt, or travel.

Walk away refers to situations where a homeowner may be able to leave a property under certain legal conditions without continuing responsibility for the mortgage, depending on applicable rules. Underwater describes a property where the total debt is higher than the home’s market value, such as owing $400,000 on a home worth $300,000 leaving a $100,000 gap between debt and value. VIDEO: When walking away from a mortgage does not lead to a lawsuit Contact Los Angeles Real Estate Attorneys...

State laws can make a major difference in what happens after a homeowner stops paying a mortgage. Mitchell Sussman explains that in states with anti deficiency laws or the one action rule, a borrower may be able to walk away from the home without personal liability for the loan. In those situations, the bank’s only option is to foreclose on the property and it cannot sue the borrower for the remaining balance, even if the loan was hundreds of thousands of dollars. However, many states do not...