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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: bozwood who wrote (2454)	4/24/2002 11:12:30 AM
From: Tradelite	Respond to of 306849

Boz, I said it is hard to lose one's home by defaulting on a home equity loan or line of credit. I stand by that statement. re: the person who would just go run up his credit card bills again after paying them off with a home equity loan.....well, there is just no explanation or help for some people. And we ARE talking about those people who actually HAVE some equity in their home to borrow against, aren't we? Usually, these aren't crazy people who spend themselves into oblivion or don't mind being in debt.

To: bozwood who wrote (2454)	4/24/2002 11:43:16 AM
From: Tradelite	Read Replies (2) \| Respond to of 306849

<<A person paying 18%-24% on credit cards has, to say the least, a sub-prime credit rating. >> FYI, that's not necessarily true. I have two credit cards charging that much in exchange for giving a cash rebate on purchases and no annual fee. The cards which offer frequent-flyer miles or other perks often have high interest rates, too, I think. There's always a tradeoff of benefits. We take the rebates, would never pay an annual fee for any card, and couldn't care less how much interest a card company wants to charge if we don't pay in full every month, because we've always paid in full.

To: bozwood who wrote (2454)	4/24/2002 11:55:18 AM
From: MSI	Respond to of 306849

Hi bozwood, Re: permission of second lienholder vs first: I've been both an investor and borrower in second-mortgages in California, and the way it was explained to me, if the borrower defaulted on the 2nd, I could take over the 1st with no one's permission, and initiate foreclosure. As a borrower, if there was significant equity it was dangerous to default since the 2nd lender could take over and own the property if it wasn't cured. There are several steps and months in the process, tho'. The permission is required to place a 2nd mortgage, however, in the first place, by most lenders, due to the possible change in borrower creditworthiness. I'm not a mortgage broker, but I'd counsel anyone planning to pay their debts in full to roll credit cards into home-equity, if they wanted to reduce monthly interest costs, which tend toward the usurious. The biggest scam by credit card companies is the bait-and-switch, in spite of truth-in-lending laws, which causes the neat and tidy 8% credit card debt to balloon within months to 22% and higher, and the debt-holder can't do anything about it. Mortgage loans are better regulated, but still scam artists cause people to lose their homes altogether. It's a jungle out there, I had a neighbor ready for retirement, who lost it all in a domino effect of bad debt decisions by (a) bad IRS ruling, (b) bad CPA advice, (c) ruthless mortgage broker, (d) ruthless real estate agent. I tell my kids "read the fine print and do a spreadsheet!"