Most personal financial advisors suggest having 3 - 6 mos. level of income available immediately in case of emergencies, lay-off, etc. I routinely recommended that, as well - but I haven't followed that course, myself, a good bit of the time, even in my earning years, when income was dependent on turning up for work. And usually told my clients the following story, in case they chose to use it. Now that I'm retired, all that I have to do to qualify to have my monthly pension amount deposited into my bank account is ... ... stay alive. I may have a back so decrepit that I can hardly walk, be sick abed, travelling in Mongolia, or whatever - it still gets deposited. Which means that I am less at risk of needing emergency money than when employed, with less assurance of continuing income. Sometimes I've had a substantial balance on hand, usually mostly in stockbroker account, often mainly in money market funds, especially when the stock market seemed too high. But I have drawn a number of certificates for my equity-based mutual funds (no fee), and paid to have certificates issued for a number of my stocks, then have used them as collateral underlying a fully secured Letter of Credit at the bank (lower interest rate than borrowing from broker), currently 6%. I think that setting up a Home Equity LOC often requires some fees, and there were none asociated with mine, based on easily saleable securities. Some charge a fee to let it lie unused, but mine does not, and it lies unused a good portion of the time. Sometimes I use it when in need of unexpected purchase, e.g. buying a car (but bought two older models within the past year and a half, for - under $3,000. - cheque). I have a "credit" (really "debt") card, which I don't use much, but I could use it for immediate emergency, drawing on the LOC to pay the balance before the due date, so no interest. One problem with this system is that one usually needs about $20,000. of asset value in order to qualify for a $10,000. loan. And I would recommend that one not draw full value of that credit available - for if the value of the underlying stocks decreases by 20% ... the amount of loan allowed will decrease by 10%. If a larger amount has been borrowed, the lender will require cash or more securities - today ... or tomorrow, at the latest. I've never borrowed so close to my credit limit that I suffered a margin call - don't ever want to, either. If I borrow for emergency use, the interest that I pay on the loan is not deductible (but the underlying mutual funds and stocks continue to earn - and grow, most of the time). If I use the LOC to borrow to invest, the interest is deductible. I wrote a post starting a thread here a few week s ago telling how I thought that I can make such a loan at almost no net cost. Which makes it wise for me to have two letters of credit, one for emergency use, one to use for investment loans, when I choose to make them. (I should have made some of the latter about three or four years ago - but didn't). Over a substantial period, the mutual funds pay me a variable current rate of return. The dividend rates on the stocks tends to grow, over time. Usually lower than the interest that I could earn, I agree, but that's fine - I don't need the money now. Most of those earnings come to me at a much lower rate of tax than I'd have to pay on interest income, which is taxed at top rate. When I put my money into a CD, GIC, bond or other instrument where the number of base dollars is guaranteed not to shrink, there's another guarantee that the bank never mentions - it can't grow, either. The only earning that I can obtain from that money is the interest. And interest income is all earned now. And it's taxed at top rate - I like to avoid that, when possible. Most of my equity-based mutual funds, and stocks, increase in value over time. I don't receive any of that value now. So I'm not taxed on it now. I only have to realize that increased value when I sell them - or die - which gives me a good deal of the value obtained in tax-deferred retirement accounts, which defer tax liability until withdrawals are made. But those with retirement accounts have every dollar withdrawn added to income and taxed at regular rate. When I cash my investments, I usually pay tax at a much reduced rate. I like that system better than having my invested dollars earn all that they'll ever earn relative to this year, right now, and taxed now, plus taxed at top rate. I'd prefer to defer part of the income - and pay tax then ... at a reduced rate. Such a system might work for some of you, should you so choose. ole joyful

Thank you all for responding to my post. All of you were correct in your comments. First, the reputable company that I was told was reputable turned out not to be so reputable afterall once I did my own Private Eye Work :-) on the internet (Can I mentioned the company name on this site?) Plus this type of loan is considered a negative amortization as stated in the comments which mean instead of your balance decreasing it increases...who in their right mind would assume a loan of this type? Anyway, the gentleman called me at work today and I was very nice but I did not give him any impression that I knew what type of loan this was. He goes on to tell me how much money I would save with this 1.95%, 5-year fix but left out the most important info but being me I let him continue with the lies he were telling. I think it bothered me more because if I had not made myself familiar with this type of loan after reading all of your responses, I would have been one of those SUCKER!!!! that he would have licked all the way to the bank. I think at one time he felt as though he had sold the info to me and I was going to accept but that's when I asked him...WHAT IS THE REAL PERCENTAGE????? I further explained to him that I read a 1.95% loan could actually be a lot higher (i.e., 7.15%) but of that 7.15% you only pay 1.95% for the 1st 5 years...so say for instant the figures comes out to be 5000.00 a month for the mortgage based on the principle balance of the house....you take 1.95% of that then deduct that figure from the 5000.00 original mortgage...BUT THIS IS THE KICKER....whatever the difference...it is added to your principle balance for the next 5 years....so say it was 1/2 of 5000.00, $2500.00 would be added to your principle balance for the next five years. The gentleman also stated...oh by the way your mortgage will go up slightly each year during those five year in the amount of around 200.00. ARE YOU CRAZY FOR EVEN TELLING ME THAT :-) I then asked him, so a person getting this type of loan will put them right back in the same status when they initially applied. Sounds to me this type of loan is for someone who is HOUSE POOR or about to lose their home which I neither of the two. I politely told him NO and I am just fine with the current loan I have. There is an article on www.money.cnn.com that talks about these types of loans and how dangerous they can be. Thank you guys so much. Without your responses I would not have dug so deep into the internet for info regarding this subject. Who wouldn't want a 1.95% loan...I DEFINITELY WOULD but only if it was legitimate. Once again, thanks.

The issue before the courts is going to be establishing what level of proof is adequate that the note exists (and the debt it thereby evidences), and how to establish ownership of the note. It is a real mess (as Deutsche Bank found out after it closed the bond issuer (that did own the notes) to save money that backed the bonds issued. The bondholders own a share of the now closed issuer, but NOT the underlying notes. Ownership of the notes (and thus they debt they show) was in limbo till the court was convinced the the notes had indeed been assigned to Deutsche Bank. Wall Street and the banks played fast and loose with ownership of the notes and are now going to pay a price (that could have been avoided with better record keeping). The servicing of the notes became divorced from the ownership of the notes, with no real records of who held the 'wet ink' paperwork.

For those that didn't see my other thread. I am OK. My husband and I and Mia were rescued by boat yesterday. Currently we are at a neighbors house that doesn't flood. We have no vehicles they are completely under water. Our house is now under water to the roof, total devastation. The Rv also took in water and is probably pretty full. The instructions given to all of us from the beginning was not to leave not to evacuate because we would cause road blocks and the ones on the coast being directly hit needed to be able to get out. This was not the track it was supposed to follow. This is of historical proportion we have reached the 800 year flood level. We passed the 500 years flood level. Last year we hit the 500 year level twice. We are dry, have food for now and safe. We have no idea what our future holds. We have no vehicle so we can't leave. Moving won't take much because we have zero stuff. So great to hear everyone is doing well. Terrilyn has anyone heard from her? My phone died in the rescue so I lost my phone numbers. Thanks everyone!