valuemanager03

The Economics of Second Liens

OK recounting of the facts... until your last paragraph - which advocates people maxing out their line of credit in hopes of paying 10% back on it. That's not the 'worst-case' scenario. The worst-case is you lose the house (which is the only reason the 2nd lien holder would accept 10% or nothing) - and your credit is wrecked so you go back to renting for 7 years. The other scenario is that they stay in their home, and have to pay off 100% of the loan plus interest over time.

Losing the home may be the only option for stretched borrowers - but unfathomable to recommend anyone to do that and guarantee that they drown in debt. It's thinking like that which is reducing the countries financial smarts and wrecking families.