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Old 05-09-2008, 11:06 AM   #1
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Not sure what this means...

Hi all,

I bought my home in December 2006. I put down 20% and got a plain vanilla 80% LTV 30 year fixed rate mortgage from USAA. I also got a HELOC from USAA at the same time that was up to 100% LTV, so the line on the HELOC was equal to 20% of the value of my home.

I went ahead and made all my regular monthly mortgage payments. I never drew on or used the HELOC in any fashion; it just sat there with a zero balance.

I recently refinanced to a plain vanilla 80% LTV 15 year fixed rate mortgage from PenFed. Everything has gone perfectly except one thing: both USAA and my local county recorder's office think that my HELOC is still open.

When I was talking with PenFed during the refi process, they said that the HELOC would need to be closed, but that they would take care of it. Apparently they never did.

From what my simple non-legally trained mind would guess, I think I now have the USAA HELOC in first position and my PenFed mortgage in second position. I would also guess that this state of affairs is fine with me and USAA, but that PenFed might take issue with it.

I don't have any current plans to use the HELOC, and I'm just making my regular monthly payments on my new PenFed mortgage. If I had the choice, though, I'd rather have the HELOC than not.

Is there any way this situation could come back and bite me?
Is there any way this situation could be advantageous to me?

2Cor521
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Old 05-09-2008, 11:09 AM   #2
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Mum's the word, so long as USAA is happy. Check has already cleared from Pen Fed and they made the error, so I think you are good.
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Old 05-09-2008, 11:17 AM   #3
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Originally Posted by SecondCor521 View Post
Is there any way this situation could come back and bite me?
Is there any way this situation could be advantageous to me?
One advantage is that you have a HELOC in place, without all the fuss and possible closing costs and such that a new HELOC might entail.
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Old 05-09-2008, 11:28 AM   #4
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The only way a Heloc came back and bite me was on insurance . While you have a Heloc in place you can not self insure .It is considered a mortgage even if the balance is zero . With some of the outrageous insurance rates in Florida you are pretty much at their mercy .
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Old 05-09-2008, 12:39 PM   #5
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Thanks everyone. I guess the scenario I wonder about is if I ever do need or want to use the HELOC, would I run into problems?

Moemg, I won't be self-insuring for a long time, and I'm in Idaho so my rates are really low. (Other than the low insurance rates, though, Idaho is a horrible place to live.)

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