Posted on: 14th Jul, 2010 10:41 am
I heard from some of my friends about equity grabbing. What is equity grabbing?
I want to understand the terminology of euity grabbing. If anyone explain that will be great.....
I want to understand the terminology of euity grabbing. If anyone explain that will be great.....
According to Bankopedia "When the lender attempts to steal the borrower's equity by setting them up to default on their loan."
Scenario - you own a house (say bought at 100K) you have been paying on and have $50K in equity. Slick Finance, Inc. persuades you to re-fi your house in such a way that you are almost guaranteed to default. They write the loan for $60K and when you default, they sell the house for $75K. That's a very over simplified version, but you get the idea.
Scenario - you own a house (say bought at 100K) you have been paying on and have $50K in equity. Slick Finance, Inc. persuades you to re-fi your house in such a way that you are almost guaranteed to default. They write the loan for $60K and when you default, they sell the house for $75K. That's a very over simplified version, but you get the idea.