Quote:
Originally Posted by Hugh R
No experience here, but I've heard that if you refi a house and take the cash and buy an Escalade or whatever, the bank can't touch it. I think a lot of people in CA did just that.
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That's true. When you refi a house, the only collateral the bank has is the house. It does not have any security interest in whatever objects you buy with the refi money.
That's one of the reasons why so many banks are so deeply screwed. When the value of the house goes down 40%, they end up being unsecured in a big amount. If they are a second lender, they usually end up being totally unsecured and lose everything.