If you hold a credit card, you may soon be feeling the affects of the HELOC crisis. Even if your home equity loan has been safe from freezes and limit reductions, credit card companies may raise your rates. Consumer card lenders know that HELOC options are drying up - they’re taking advantage of the fact [...] [...more]
In the past decade, home equity lines of credit (HELOCs) have become a major source of college tuition funding. If an undergraduate’s parents make too much money or if he is attending a pricey private program, the student may not qualify for competitive federal loans. As an alternative, parents often draw on their home’s equity [...] [...more]
During the housing boom, HELOC lenders regularly offered home equity lines of credit at 90% or even 95% of the borrower’s home value. As home values declined, these loans became increasingly risky for banks. If a borrower has a 95% loan-to-value HELOC and his home declines 6%, the borrower is unable to pay back the loan [...] [...more]
If your HELOC has been frozen or reduced, you may be able to fight back. Many home equity lenders are offering borrowers the chance to reverse these actions by proving their home’s value. Kiplinger reports: “Lenders who pull the plug will invite you to contact them to discuss your situation and appeal the decision. You may have [...] [...more]
We’ve previously reported that HELOC lenders are freezing lines due to declining home values and non-use. However, your HELOC may be in danger even if these concerns do not affect you. Kiplinger recently published an article detailing possible triggers that may cause lenders to freeze HELOC lines: “Declining local home prices may prompt your lender to padlock [...] [...more]
National City, a major HELOC lender, is now on a form of probation with federal banking regulators. Reuters reports: “The banking subsidiary of National City Corp has signed a confidential memorandum of understanding with U.S. regulators, promising to address its rising amount of bad loans, a source familiar with the matter said on Monday. The memorandum signed [...] [...more]
As home prices continue to drop, HELOCs have become a greater risk to lenders. Losses on home equity lines of credit have skyrocketed during the past few months and many analysts believe this trend will continue for some time. Financial Week reports: “Home-equity lending has grown dramatically in recent years, more than doubling since 2002, to about [...] [...more]
One of the biggest complaints about the mortgage crisis is that homeowners used their equity irresponsibly during the boom. Now that HELOCs are harder to get, will homeowners spend less? The Wall Street Journal explores this question: “Steindel [economist at the Federal Reserve Bank of New York] spoke at an event sponsored by the National Economists [...] [...more]
A new report from J.D. Power and Associates ranks home equity lenders according to the results of a customer satisfaction survey. As I reported earlier this week, overall customer satisfaction has improved since last year. However, not all HELOC lenders faired equally. Here are the results, on a scale of one to one-thousand: Bank of America: 811 SunTrust: [...] [...more]
The availability of no-doc and self-employed HELOCs has pretty much dried up. But, many HELOC lenders are still advertising these loans on their websites. For example, if you take a look at Wells Fargo’s main home equity webpage, you’ll see information for self-employed borrowers. Here are a few of the “benefits” that they claim to offer: - [...] [...more]
