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HELOCs Are Back in Vogue

According to the Wall Street Journal, rising home prices are causing consumers to again begin to tap the equity in their homes for cash.  This is the source of funds for many settlements that can be achieved with debtors, indemnitors and principals.

The Journal cites that home equity lines of credit (HELOC’s) rose 8% to nearly $46 billion in the second quarter of 2017, their highest level since 2008.  Rising home prices are driving the demand for this product according to the WSJ.  Because borrowers attempt to repay HELOC’s around the ten year mark of the loan, the large volume of HELOC’s originated a decade ago are being paid off and new HELOC’s have still not offset the repayments despite their recent rise.

This is good news for creditors.  Home equity is beginning to grow and it has been a frequent funding source for settlements reached by K&F over the years, both small and large.