Legal Question in Real Estate Law in California

Re: helock loans

$200 a month interest on a principal balance of $27,000 is only about 8.9% per annum, and while perhaps not the best deal available, it isn't all that bad for a relatively small HELOC. Better rates are often available on larger loans. The interest rate is well below the usury level (10% in many cases), and a bank or licensed loan broker would be exempt anyway, so I'd say the interest rate is unquestionably legal.

Whether the rate being charged conforms to your contract or not is, of course, an entirely different matter, but without knowing what your loan contract says, I can't say one way or the other.

As to why your statements show an increasing principal balance when you have been making payments large enough to amortize (pay down) the loan is also another mystery. My first guess is that you are mis-reading the statements. If not, then my next guess would be that the bank has a flaw in their computerized accounting system. In either case, I recommend having the bank explain your issues rather than paying a lawyer.

Finally, of course the lender put a lien on your house. That's what always happens when you take out a home-equity line of credit (HELOC). If your total line is, say, $100,000, the bank will record a deed of trust (which you signed when you completed your application process) to place a $100,000 lien on the house. If you never borrow a penny, the lien will still be there, just in case you did someday decide to use the credit.

Re: helock loans

The actual loan paperwork would need to be reviewed before an attorney can properly guide you or spot any illegalities that may warrant remedies for you. Email our Law Firm directly for further assistance in this serious matter. We can also provide you with invaluable advice on how to effectively and efficiently pay off the loan principal ASAP.

Re: helock loans

I would be happy to review the loan contract to determine the validity of the lien on your house and whether or not it the interest rate is legal. Contact me directly for an appointment.