Last night I heard firsthand (for the first time) of how a two-home owner is funding monthly bills, living expenses, and two mortgages by tapping into a "line of credit" loan he has on one of his homes.
Essentially, the homeowner is allowed to borrow money each month from an equity loan that is tied to his Central Florida home. He uses that money to pay the "interest" on the two main home loans that he has.
I wondered how long this scenario could continue before the home's mortgage levels far exceed the selling and appraisal value of the home. Then I wondered if maybe it wasn't already at that point.
This is a scenario that is contributing to the mortgage default crisis that we're currently in. We will find more and more foreclosures in the Central Florida market in the coming year(s). Keep that in mind - and get your eyes and ears open!!
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