Question: I live in New Jersey and have a 1st mortgage with GMAC and a HELOC secured by the property. My home is underwater. At present the 1st is covered, the HELOC is not, and it’s about $191,000.
The HELOC people have proposed reducing my interest rate from 6.25% to 4% which reduces my payment from about $1,017/mo to about $632/month. Seems like I should sign up, right?
Except I believe they want to convert the HELOC into a loan. So, the question is, does it matter for deficiency purposes whether I maintain the HELOC, or switch into a secured 2nd?