Has anyone heard of the restriction that prohibits a customer from using the proceeds of a HELOC to purchase a residence? It is stated in our Credit Agreement, but I'm not sure where the source of this restriction comes from. Any help would be greatly appreciated.
We use Harland (Laser Pro) for Loan documentation and the language defaults into the Credit Agreement when a HELOC is being prepared. Of course we can't quite seem to squeeze it out of Harland what statutes they are relying on for putting this restrictive language in the form. All they will say is that Oklahoma and Louisiana have the same restriction.