Reply #5: Banks do NOT want to own the house. [View All]

[Worst Username Ever]

It is a non-performing asset. They make more money on interest from the loan than they ever could from selling the house, which is usually done at a HECK of a bargain, and usually only for the balance of the total liens (the first mortgage plus the second mortgage plus any other liens... no profit involved). It does not earn money like their other investments do, and they will generally do a lot of things before actually foreclosing (the bank where I work will try working out 3-4 different payment plans before beginning foreclosure).

You can get a home equity loan through a broker. Do not go through a bank, the standards are usually too high. Tell them you want a no-doc loan, also called a "stated income" loan. This is a loan that does not require income verification, so your income does not matter. You may pay a bit hight interest rate though, and they generally are going to want to see some decent credit.

Debt is usually not the answer to financial probs, though.