Seller/Borrower has right to request suspension of HELOC during escrow Presently, if a borrower has a home equity line of credit (HELOC) secured by a lien on his house, the HELOC loan is supposed to be closed and not drawn on during the sale or refinancing of the house. If the lender fails to close the HELOC during escrow and money is drawn on, the underlying lien and loan may become the debt of the innocent buyer. This law facilitates the seller’s/borrower’s request to suspend the HELOC by creating a form for the seller/borrower to sign in escrow, the ultimate purpose being to avoid the mistake of drawing upon a HELOC during the escrow or immediately following the sale of the house. Assembly Bill 1770 codified as Civil Code §2943.1. Effective on July 1, 2015 to remain in effect only through July 1, 2019. This is good.
Posted on: Sat, 03 Jan 2015 05:29:24 +0000