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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Yes, a HELOC makes a difference... Posted by Ward-CA- on August 21, 2003 at 8:32 AM In Reply to: Re: Line of credit + JBB? posted by Cary on August 20, 2003 at 10:20 PM : OK. If the junior bene buyer ends up getting cashed out through a sale or refinance, I am still assuming that a HELOC record in 3rd position should not be a concern since the only difference with a HELOC vs. a typical loan is that the principal fluctuates. Is that part correct? : Cary -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- Cary, Yes, you're right that the make-up of the 3rd is immaterial in the mechanics of the foreclosure of the senior 1st or 2nd. But in the overall analysis of the JBB (junior bene buyout) it makes a difference. And that's because before we buy into a deal we like to see what the owner's gross equity approximates. If the owner perceives she has $25K or more in equity there's a very high likelihood she's going to be motivated enough to refinance or resell the property before the 1st goes to auction. But with one of the liens a HELOC (home equity line of credit) its balance can't be concluded by an outsider. So that makes it very hard to figure out in advance what the owner is likely to do. Hope this helps. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : OK. If the junior bene buyer ends up getting cashed out through a sale or refinance, I am still assuming that a HELOC record in 3rd position should not be a concern since the only difference with a HELOC vs. a typical loan is that the principal fluctuates. Is that part correct? : : Cary : -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- : Cary, : Yes, you're right that the make-up of the 3rd is immaterial in the mechanics of the foreclosure of the senior 1st or 2nd. But in the overall analysis of the JBB (junior bene buyout) it makes a difference. : And that's because before we buy into a deal we like to see what the owner's gross equity approximates. If the owner perceives she has $25K or more in equity there's a very high likelihood she's going to be motivated enough to refinance or resell the property before the 1st goes to auction. : But with one of the liens a HELOC (home equity line of credit) its balance can't be concluded by an outsider. So that makes it very hard to figure out in advance what the owner is likely to do. : Hope this helps. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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