“Still Lots of Issues Refinancing Home Equity Lines”

“Still Lots of Issues Refinancing Home Equity Lines”



Many parts of the country have had enough real estate value appreciation to be able to refinance their home equity lines, but I still run into many folks that do not have any equity or own more than the debt.


Danielle has a home worth about $225,000, has a balance of $165,000 on her first mortgage and has a home equity line that has a balance of $100,000. The math just won’t work to do a new mortgage and after this month the lender will no longer accept payments as the loan is now due.


Once the lender stops taking the payments, the credit reporting companies will start reporting the mortgage and the payments in default. So what are folks that are in this situation to do?


I had the clients notify the lender that they want to modify the loan and start amortizing the loan over some time period. I wish there was a way to help Danielle, but the current lender has complete control of the situation and if history has anything to do with the future they will take their good old time to get situations like this resolved.


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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com



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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Comment balloon 20 commentsJoe Petrowsky • October 28 2015 05:54AM


Good morning Joe,

The banks have the resources to sit back and make it difficult for the little guy.

Make yourself a great day.

Posted by Raymond E. Camp, Licensed Real Estate Salesperson Greater Rochester (Howard Hanna Real Estate Services) almost 4 years ago

Good morning, Joe Petrowsky time heals everything.... eventually, the market will catch up to cover those balances....

Posted by Barbara Todaro, Marketing Agent for The Todaro Team (RE/MAX Executive Realty ) almost 4 years ago

That just stinks.  I'm so glad that my biz loan has a 15 year life, so I have another 7 years to continue to pay down and hope that prices appreciate enough.

Posted by Debbie Gartner, The Flooring Girl & Blog Stylist -Dynamo Marketers (The Flooring Girl) almost 4 years ago

Kind of puts Danielle between a rock and a hard place, that sucks.

Posted by Roger D. Mucci, Lets shake things up at your home today! (Shaken...with a Twist 216.633.2092) almost 4 years ago


Another interesting case study from you.  Caution seems to be the bank's view point.  A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding, Marketing & Strategy (Napa Consultants) almost 4 years ago

Good morning Joe, there are many homeowners who are still under water, they just have to wait.

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) almost 4 years ago

Ouch!  That's a tough situation with no good solution for the homeowner.

Posted by Jenna Dixon, Empowers You With a Better Real Estate Experience (DRA Homes | Cobb County Real Estate ) almost 4 years ago

Hi Joe Petrowsky Since it is a heloc it looks like they used their house as an ATM. If anybody is going to suffer it is these people. what did they do with the money?

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) almost 4 years ago

Thanks for sharing this story. Many seniors have been counting on using their home equity line of credit to pay cash for the next home and with repayment after the sale of their current home. When the lines expire after 10 years, they no longer have that option.

Posted by Roy Kelley (Realty Group Referrals) almost 4 years ago

Good morning Joe. This is a really sad story. I can't believe they can't get out from under. Sad.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) almost 4 years ago

It makes no sence at all to me to not accept payments.  I get that the loan came due, but what will they get in the end?  Will they pay off the first mortgage and foreclose?  

Posted by Tammy Lankford,, Broker GA Lake Sinclair/Eatonton/Milledgeville (Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668) almost 4 years ago

Hi Joe -- as I was reading your post I had the same thought as Barbara Todaro. The time may not be right today, hopefully someday soon.  

Posted by Michael Jacobs, Los Angeles Pasadena 818.516.4393 almost 4 years ago

Update please; did the lender negotiate with her ?   Will they work out a payment plan ?   Will they even talk to her ?

Being at a community bank; we, too, have had customers in this predicament and we try to work with them to re-work their obligations without damaging their credit standing.

Posted by DEANNA EARLY - - ( NMLS # 268590 ), Highest Ranked Mortgage Loan Originator Virginia (American National Bank & Trust) almost 4 years ago

it's nfortunate for her, and sad that these things take so long...

Posted by Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400, Long Island Home and Condo Specialists (The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803) almost 4 years ago

Yeah there is no question our industry is still in a mess and TRID is doing ABSOLUTELY NOTHING to help but it sure is causing more problems.

Posted by David Shamansky, Creative, Aggressive & 560 FICO - OK, Colorado Mtg (US Mortgages - David Shamansky) almost 4 years ago

Joe that is a very uncomfortable position to be in.  Hopefully the present lender will cooperate with her.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 4 years ago


Are you saying that the the lady is making her payments . . . . and the bank will no longer take the payment and force her into foreclosure.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) almost 4 years ago

Ouch !  COnsumers pay the price for what never should have happened.

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) almost 4 years ago

As Conrad Allen always says, "Bad things happen to good people too."

Posted by Maria Gilda Racelis, Home Ownership is w/in Reach. We Make it Happen! (Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington) almost 4 years ago

Hi Joe.  This is a tough situation for many folks.  I hope the banks start making some intelligent options available to these folks.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) almost 4 years ago