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Difference Between a HELOC and Second Mortgage

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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.

Difference between heloc and 2nd mortgageThe 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?

Please advise. [Read more…] about Difference Between a HELOC and Second Mortgage

Filing for bankruptcy. My second mortgage, now my first?

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Question:  I am in the process of filing for bankruptcy. I am filing chapter 13 so I can have my second mortgage, which is a line of credit through Bank of America, dismissed. My attorney just called and said that because my first mortgage was obtained after my HELOC, only because we refinanced, that the court may deem the HELOC as my first mortgage. Is this possible?