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Question
I am considering opening a small business and have been approved for an SBA loan in CA. My home equity will be collateral and they will place a lien. If I do have to close the bus, can they force me to sell my home to get payment, or do they just leave the lien for whenever I do sell?
Yes, under the terms of the SBA loan agreement, the Bank whose loan is guaranteed by the SBA could sell your home to satisfy the debt. If the SBA takes over collection of the loan, they could sell the home also. However, I have never seen an instance where the SBA did not make every effort to work with the borrower to avoid foreclosing on a personal residence. If the first mortgage is more than 80% of the value of the home, it is unlikely either the SBA or the Bank would foreclose.
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Answers by Expert:
Mike Weikle
Expertise
Banking Lender Liability; Insurance Coverage; Consumer Rights; Bank Fraud; Criminal: White Collar Crime; Fair Debt Collection Practices Act; Directors and Officers Liability
Experience
Commissioned National Bank Examiner 7 years; President of Two Community Banks; Division Claims Specialist for American Bankers Association Sponsored Insurance Program; Carter Member of the Bank Fraud Team of the Office of the Comptroler of the Curency "OCC" (National Banjk Examiners); Attorney previously representing FDIC and Resolution Trust Corporation as well as consumers and commercial borrowers in claims against the banking industry; Former Data Processing Systems Examiner for the OCC; Expert Witness on variety of banking issues in both state and federal court.
Education/Credentials
Certified Public Accountant;
JD -- West Virginia College of Law - Order of the Coif
Data Processing Training Old Dominion Bank and IBM
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