Your Home Equity Loan - or Second Mortgage - May Now Be Unsecured. Here's Why.

more+
less-

When the housing bubble popped, most homes went down in value. Some went way down!

As a result, your home's value may be equal to (or even less than) the amount of your first mortgage. This means, for practical purposes, that your home equity loan - which is usually a second mortgage - is no longer secured because your home has fallen so much in value.

For example: Let's say that your home is now worth $300,000 - the amount you owe on your first mortgage is $300,000 - and the amount owed on your second mortgage is $50,000. Since your home's value equals the amount of your first mortgage, there is no equity left to secure the second mortgage.

Here's how this works in bankruptcy...

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Published In: Bankruptcy Updates, Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Fonfrias Law Group LLC. | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »