Will a revolving line of credit be called due? - Posted by Tarun_MD

Posted by Nate(DC) on December 30, 2001 at 15:45:49:


The fact that the line is closed has nothing to do with the issue of whether or not it can be called due. “Closed” simply means that she can no longer draw on the line of credit - which is a moot point, since she has drawn the maximum amount anyway.

I would suggest that you get from her (or from Homecq if she doesn’t have them) the documentation she signed when she opened the line of credit. I would be there is language in there stating that it can be called due at any time for any reason, and that this right is not terminated if the line is closed.

However, I would think this would be treated like any other mortgage - i.e. if it’s current, they’ll leave you alone. Maybe if the back payments are made up you will feel more comfortable leaving it in place. How much equity is in this deal anyhow?


Will a revolving line of credit be called due? - Posted by Tarun_MD

Posted by Tarun_MD on December 28, 2001 at 18:31:16:

Today I signed a purchase and sale agreement to purchase a house subject to.
This house has a 107k first mtg at 6.99% and an 18k revolving line of credit as a 2nd mtg at 10.5%. She basically has a credit card with an 18k limit which is secured by a second mtg.
She is current on the 1st mtg but is 2 payments behind on the 2nd mtg. I am not concerned about that since its a very small amount. She has used up the ENTIRE 18k and Homeeq(a division of the money store) has closed the line of credit because of her delinquencies.
Should I be concerned about Homeq calling the loan due if I buy this house subject to…especially since there is a revolving line of credit on this house with them.


Re: Will a revolving line of credit be called due? - Posted by Erik

Posted by Erik on January 30, 2002 at 23:26:41:


I found your old post on the archives. I am in the exact same situation that you were in. I got the deed to a house today that has a first mortgage by homeq and a line of credit also by homeq. What happened with your situation? Did they call the loan due or the line of credit? The seller and myself put the house into a land trust. However, I won’t be making any payments on the house until I find a tenant/buyer… at that point all back-payments will be made. I figure I will have about 3 months to find a buyer before homeq starts to foreclose. But this all may be moot if the line of credit screws everything up. Any advice will be appreciated

Re: Will a revolving line of credit be called due? - Posted by David Alexander

Posted by David Alexander on December 28, 2001 at 18:41:10:

Yes, you should… Although, I have never taken one subject to with a credit line like this, I have heard they will call them in a heart beat…

Either have her refi, figure out a way to pay off the second or buy it or the first at a discount… or pass… to the next deal.

David Alexander

The line of credit is closed - Posted by Tarun_MD

Posted by Tarun_MD on December 29, 2001 at 16:06:49:

The revolving line of credit is closed. She has used up the entire 18k and is 2 payments behind on that. Why would they want to call the loan due on a line of credit that is closed? Obviously she can’t take any more money out of it.
If I can’t take this house subject to because of the line of credit issue, I’ll probably have her put the property in a trust with her being the beneficiary and lease option from the trust and then sandwich it.