You should NEVER NEVER NEVER convert your traditional, fixed P&I or even an ARM First Trust Deed, that is NON-RECOURSE into a HELOC. HELOCs are RECOURSE loans that can be easily transmuted by the lender into revolving type unsecured notes that may never go away even after you have refinanced or sold the property.

This has been around for 10 years and many unsuspecting homeowners that are foreclosing or trying to short sell are not able to wipe out these loans because they are not closed traditional first mortgages. The HELOC lender will approve a short sale or deed in lieu but still pursue the homeowner for the full balance of the unpaid obligation for up to 25 years!