Wednesday, March 5, 2014
Trouble around the bend
HousingWire, citing Springboard Nonprofit Consumer Credit Management, notes that trouble may be coming soon for borrowers with HELOCs, as almost half of all HELOCs -- to the sum of $221 billion -- will reset in the next four years. A major reason for concern is that the article cites data showing the majority of HELOCs outstanding today were taken out between 2004 and 2009. Many of these loans during this time span are designed with lower payment terms for the first 10 years before resetting, in most cases, to fully amortizing loans. Depending on the specific terms and amounts of the loan, consumers could see substantial increases in monthly payment amounts.