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photon · 05-26-2006, 05:25 PM

I don't believe so, the LoC is still secured against the house. Just as if your mortgage was a 5% mortgage and house values went down 10% it wouldn't mean the bank would forclose on the mortgage.

If the market went down 15% the bank would have to do cash calls and forclose on everyone, but then they'd be left with tons of houses to liquidate and no one to buy them.

The last thing a bank wants to do is to have to deal with that kind of thing.

05-26-2006, 05:25 PM	#26
photon The new goggles also do nothing. Join Date: Oct 2001 Location: Calgary Exp:	I don't believe so, the LoC is still secured against the house. Just as if your mortgage was a 5% mortgage and house values went down 10% it wouldn't mean the bank would forclose on the mortgage. If the market went down 15% the bank would have to do cash calls and forclose on everyone, but then they'd be left with tons of houses to liquidate and no one to buy them. The last thing a bank wants to do is to have to deal with that kind of thing. __________________ Uncertainty is an uncomfortable position. But certainty is an absurd one.