You will not be able to keep your home equity line of credit if your house is in foreclosure or anything similar to it. This is standard across the United States.
The foreclosure will be on your credit report indefinitely.
Even if you have had a foreclosure, tax on a second mortgage or home equity loan is still deductible.
If you mean by surrender you are in foreclosure, the answer depends on how far along in the process you are and how much equity you have in the property. The short answer is you will still have damage to your credit rating and a foreclosure on your record. You should call your lender immediately to try to work out alternate arrangements. They generally do not want to foreclose and will try to work with you.
Both can hurt a lot, but your credit still can be restored after this.
If the Foreclosure proceeding had already begun it will remain on the credit and should show a zero balance. But it will continue to show the Foreclosure was in effect at that time. If it is still showing a balance contact the credit bureau to have the information updated. You must have proof in hand.
A person with bad credit can still apply and get a home loan by using the equity in their home as collateral. The more equity in the home the better the chances of being approved for the loan.
If the lender does not correct your credit report, then you could send a letter and a copy of the court's decision to the credit agencies. Still, a notice of foreclosure may remain, and I am not sure whether you can make that go away.
You are not responsible for the loan. You simply have a right to any equity that might be in the home. The bank will foreclose, sell the house, and if there is any money left, you would be entitled to it.
The damage to your credit score and how fast it recovers depends greatly on the rest of your credit history. Someone who has no other issues will rebound faster than someone who had other late payments or a lower score to begin with. If the foreclosure is the only issue, the score should begin to rise within a few months and may slowly recover to pre-foreclosure leves over the next couple years. The score is separate from the actual foreclosure reporting as a derogatory item as far as obtaining new credit. It is possible to have an acceptable or good FICO score with a dated foreclosure on your credit and still not be able to get credit because of the derogatory item. The foreclosure itself will report for 7 years but it's impact on your score will less as time goes by.
People with bad credit may still be able to quality for home equity loans with a few companies. Quicken Loans, TruStone Financial, and Downs Inc all have programs to lend to those with bad credit.
Even when one had bad credit, it is still possible to refinance a home equity loan. The equity in one's home will help secure financing, as the equity secures the loan. Some lenders even specialize in helping those with bad credit secure refinancing of home equity loans. Before shopping around for loan rates, it's a good idea to first clear up one's credit by paying bills on time, paying more than the minimum payment on debts, paying down credit cards and decreasing one's debt-to-income ratio.
Yes, a voluntary foreclosure (deed in lieu of such) is a foreclosure just as a voluntary repossession of a vehicle is a repossession. All the same penalties/fees, recovery of debt laws apply and the information entered on the debtor's credit report will be as a foreclosure regardless of the circumstances involved.