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

To: deeno who wrote (51487)	4/5/2006 8:11:34 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

You will find, in most states, there is a substantial difference between the contract that you sign on a HELOC and the one you sign for a purchase mortgage even though both are secured with a house. The bank has every right to come after you for a deficiency on a HELOC when the repossession and sale of the house doesn't cover the outstanding loan balanced. Whether they do or not depends on how much they have to eat as opposed to how much the legal cost of going after you comes to. People get away with this sort of thing because the lawyers cost more than the bank can reclaim AND some other poor schmuck, like the little old lady with the Fannie Mae fund, is going to lose, not them. The guy who made the loan to the original borrower is long gone out of the picture. The bank is usually only the servicing agent.