HELOC effects on the declining value...

This is something I just thought about with all the softening of values going on in the west coast.

What would happen if you took out a HELOC for the maximum value of the equity on your home and your home goes down in value(due to optimistic appraisal or just market conditions)? Will/Can the banks or lenders do anything?

Just a hypothetical since I’m bored here at work today.

Yes…they can keep making you pay the agreed upon rate for the agreed upon duration or foreclose on the property.

Keith

Foreclose on the property??? You mean, if I don’t make the payments, right? You don’t mean they’ll force a foreclosure just because the value declined, right??

No foreclosure unless there is a default…LOL…I can see it now…The jerk down the street takes a low ball offer on his house and then the bank comes and forecloses on your house…LOL…If that was standard operating procedure I think the murder rate would sky rocket.