If the property sells for $250,000 or less the HELOC gets nothing, after the 1st is paid is when the HELOC gets monies.Thank you very much for clearing my confusion.One more question.Wouldn't it result in loss for the 2nd mortgage?

@Samuel Ksiazkieicz and @Amy LuThere are various companies like foremost, diamond preferred, Aegis, North Pointe.. based on location, rental loss coverage, swimming pool in property or not, pets etc.; the rates are different for various locations.Normally, I use an agent; who helps to locate the  best price. 

Clerk said that if I can cite laws to support collecting other future losses until I can get a new tenant might convince the judge.

So, ideally a 30yr track record with no investor losses across hundreds of deals is preferred, but in reality, for many people reading this, you will either get experience and long track record, OR impeccable, no investor loss track record.  

So sorry for all those that had to find out the hard way, but just know you have paid it forward educated us and saved us from a financial loss, wasted time and stress. 

Sounds like something else may be up, but either way I don't think you should have to take the loss here.

Leaning towards the incompetence end of things - I have been ok with taking a loss where it makes sense.

My presentations were geared towards new construction, but there are ways to improve existing homes as well.The main keys are to understand how energy (heat/cold) moves through houses and how to eliminate the weak links in heat loss/gain. 

@Caleb Heimsoth After it became clear that Clayton had no intention of performing on his buyback agreement, I sold it on the open market at a huge loss in order to prevent continuing lawsuits from Marion County for health and safety violations. 

See if they will help compensate you for your losses.