Comments on: Are Heloc defaults about to spike? http://blogs.reuters.com/felix-salmon/2013/11/26/are-heloc-defaults-about-to-spike/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: cmonneron http://blogs.reuters.com/felix-salmon/2013/11/26/are-heloc-defaults-about-to-spike/comment-page-1/#comment-48704 Fri, 29 Nov 2013 03:02:35 +0000 http://blogs.reuters.com/felix-salmon/?p=22795#comment-48704 Another, less charitable, interpretation of your data is that Banks create new HELOCs to pay back for the old ones, thus avoiding the principal to be amortized. More interest income, less current delinquencies… what not to like ?

Extend and pretend of course, but such is the zeitgeist !

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By: Sechel http://blogs.reuters.com/felix-salmon/2013/11/26/are-heloc-defaults-about-to-spike/comment-page-1/#comment-48687 Tue, 26 Nov 2013 22:41:33 +0000 http://blogs.reuters.com/felix-salmon/?p=22795#comment-48687 What the government’s response to the mortgage crisis taught me and surely taught the banks are that HELOCS need not b considered junior debt. Often they were written down pari-pasu with senior debt and sometimes borrowers would pay the 2nd lien while no paying the 1st. The banks found it more convenient to write-down other people’s money than their own. The difference being banks retain HELOCS while selling off the senior 1st lien debt.

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