The correct answer is, refinance the first while it’s still beneficial to do that (or don’t – 5% 30-year fixed is quite good to begin with). Miss a payment on HELOC, then call them, inform them that you’re upside down, inform them that they’ll be wiped in the event of a foreclosure, and offer to settle for $5,000 cash.
Of course, this answer is not suitable to be printed in a real estate tips section of The Washington Post.[/quote]
That’s what I was aiming at.
The HELOC is utterly underwater, screw them, they have nothing.
What are they going to spend 50K on foreclosure?
Keep paying the first and ride out the wave.
or
Stop paying both, save the money and when the first comes
to foreclose string it out, and move into an apartment.
It makes no sense for someone in California who is -35% on equity
to pay into a mortgage that is never going to see the surface in
our lifetimes, unless you really expect the inflation rates to explode.
if we go into 100% inflation, then sure, he has a decent asset,
but, I kind of doubt that will happen.
