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Foreclosure Forum |
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Re: Line of credit + JBB?In Reply to: Re: Line of credit + JBB? posted by Ward-CA- on August 20, 2003 at 10:14 PM : : Ward, : : From reading your archives, I believe a home equity line of credit (HELOC) is just like a typical trust deed, the priority of the lien is based on the time it is recorded, but the principal can fluctuate. : : Does that mean that if I am doing a junior bene buyout on the 2nd trust deed (for cashflow purposes), there should not be much of a concern on a HELOC if it is in 3rd position. Is that correct? : : Thanks for your help. : : Cary : Cary, : No, you don’t do a JBB as a source of continuous cashflow, like holding a promissory note for its income. Your 2nd position should result in a full payoff, due to a refinancing or resale of the property. ================================== Ward, I understand that the primary exit strategy on a JBB is to get cashed out with a refi or sale, but is it OK to buy the junior lien and simply hold as a source of continuous cashflow? I mean, it's not illegal or anything, right? Cary Follow Ups: Post a Followup:
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