Home Equity Line of Credit After Bankruptcy and Foreclosure

[jwsmartin]

We have a three year old bankruptcy and foreclosure. We would like to get a 100% home equity line of credit on a new FHA mortgage we have. Currently mortgage is for 270k and we bought the home for 300k. We put 30k down.

Anyone know if this is possible, and if so can you lead us to a good lender? We are in Tulsa, Oklahoma.

Thanks!

[BobMango]

I have a 100% HELOC on my property, but I got it way before filing. The requirements to qualify were quite stringent as I recall, minimum credit score of 740, 25% equity minimum, etc. There was a mortgage company in Seattle that we worked through, CMG was the name as I recall. The loan was placed with GMAC and the linked bank account is now Ally Bank. The loan was indexed to the LIBOR and I bought down the margin to .55 so now my effective interest rate is under 1%. In the almost 6 years I've had the loan I've never paid more than 3% interest. This is the only thing that has allowed me to keep the house. My payment (interest only) is under $300 but I have rented out the property for significantly more now. The only thing killing me has been the $15K in back taxes that will be paid up this month.

For those that may not know what this is all about, allow me to explain. For this type of loan you are typically required to have your pay direct deposited into a linked bank account. Each day, all funds from your account are swept into the HELOC, lowering the amount you owe (and thus the amount you pay interest on for that day.) Any spending you do will cause funds to be pulled from your HELOC to cover. If you are disciplined and spend less than you make each month, you can pay off your mortgage very quickly (5-7 years). Since the loan is a HELOC you can move funds into and out of the loan very easily. The HELOC is required for this to work since you cannot easily extract any excess funds you pay on a traditional mortgage.