From the article
IS it possible for a homeowner who owes $725,000 on a mortgage to sell a house for only $560,000 and still walk away happy, or at least relieved?Yes, more HELOC Heaven - this time in Upstate NY. He bought the house ten years ago so technically he would start building up some equity just from the original purchase price and paying off a decent chunk of the principal. However, he decided to cash out over $415,000 on the property with most of it taking place within the last 5 years. Wow that is like a second income of over $80,000 per year - Wow. I notice it is always medical and college issues that people site - but remember this post from last month
...The owner had been grappling with the costs of college tuition and a parent’s medical bills, and had refinanced the mortgage loan six times in five years to meet the growing expenses, Ms. Cunningham said.
The owner decided to sell the house, bought in 1999 for $310,000. But the $700,000 that a 46-year-old ranch in good condition might have fetched in a more robust market was not realistic.
Last year, 34 percent of borrowers said they used their home equity lines to pay off other debt and 29 percent used them for home renovation, according to a survey of lenders by BenchMark Consulting International. Another 31 percent used them to pay for other things, such as medical bills, weddings or vacations.I wonder how much was really used for frivolous expenses and the "rock star" lifestyle.
But don't worry - this is still a happy ending.
“In the end, the seller got out from under,” the lawyer said. “The buyer was happy because he got a bargain, and the bank was pleased to have the situation solved.”