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I am planning on doing a strategic default. Purchased my condo for 230k, it is now worth about 60% of that. I have a 80/20 loan with WF. From my understanding it is non-recourse because it was all purchase money. My question is I have $5k in available credit in my HELOC. If I pull that money out of there will that open me up for recourse on the 2nd? Any help is greatly appreciated.
[QUOTE=benny;386043]I am planning on doing a strategic default. Purchased my condo for 230k, it is now worth about 60% of that. I have a 80/20 loan with WF. From my understanding it is non-recourse because it was all purchase money. My question is I have $5k in available credit in my HELOC. If I pull that money out of there will that open me up for recourse on the 2nd? Any help is greatly appreciated.[/QUOTE]
Welcome and thanks for joining the community.
Have you ever pulled any money out of the HELOC in the past?
Yes, I pulled out $500 for an appraisal when wf did a harp refi.
[QUOTE=benny;386159]Yes, I pulled out $500 for an appraisal when wf did a harp refi.[/QUOTE]
Oh so you recently went through a HARP refinance?
Yes, in january 2011
The harp refi was only on the 1st. The heloc is the original.
[QUOTE=benny;386228]The harp refi was only on the 1st. The heloc is the original.[/QUOTE]
Actually a HARP refi and any refinance will turn the mortgage into a recourse loan. The reason why it become recourse is because the lender taking a risk financing your loan. If they're going to lower your payments through a refi, you and your lender are taking an equal risk against future default.