Wells Fargo has seen some improved earnings this quarter. But, the lender continues to face major losses from home equity line of credit customers. Market Watch reports: “Within Wells Fargo’s $84 billion home equity portfolio, 2.11% of loans had two or more payments that were late at the end of June. That’s up from 1.86% [...] [...more]
If you’re an IndyMac customer, your home equity line of credit is now inaccessible. After taking over the struggling bank, the government has frozen all customer HELOCs. The FDIC says that home equity lines will be reviewed on a case-by-case basis. But, no information about the review process is currently available. It is possible that [...] [...more]
The Department of Housing and Urban Development recently proposed several new lending rules, including one that will affect HELOC good faith estimates. Good faith estimates are supposed to be a consumer tool. In the ideal world, a borrower could collect several good faith estimates from home equity lenders, compare their rates, and select the best [...] [...more]
Today, IndyMac Bank was seized by the federal government after cash reserves fell too low and the bank was no longer able to operate. The fall of IndyMac, a major HELOC lender, is reported to be the second largest bank failure in the history of the U.S. Consumer Affairs reports: “IndyMac was founded in 1985 [...] [...more]
In a recent interview with the Los Angeles Times, Bank of America CEO Ken Lewis discussed several aspects of the lending crisis, including bank losses on home equity loans. Here a blurb: “Home equity [loan] deterioration has been much more rapid than we predicted. Our portfolio has a lower loss rate than most but the [...] [...more]
In the midst of all the HELOC freeze turmoil, most major lenders continue to advertise. Just today I received an email advertising home equity lines of credit from Wells Fargo. They say: “Rates are at their lowest levels in over 3 Years — there’s never been a better time to apply.” That may be true [...] [...more]
In the last few years, bankruptcy laws have become stricter. In some cases, a judge will eliminate HELOC debt. However, it has been standard practice to keep debts in place in cases of fraud. If a borrower lies on a loan application (which happens regularly with stated income loans), a judge will generally not discharge [...] [...more]
Lenders don’t give any warning before freezing a home equity line of credit. Telling their customers ahead of time would defeat the purpose, since many would max out their lines if given advance warning. This policy has led to major trouble for some HELOC borrowers – namely those who have recently written HELOC checks or [...] [...more]
More HELOC customers are now delinquent on their loans than have been since 1997. MarketWatch reports: “Delinquency rates for home equity lines of credit and bank cards rose during the first quarter, the American Bankers Association reported Wednesday, citing ongoing housing market stress and general economic weakness.” HELOC delinquencies have reached 1.1% – meaning that [...] [...more]
Finally, some good news for HELOC borrowers. Recently, the FDIC recently sent a letter warning lenders to follow proper procedure when freezing home equity lines of credit. Here are a few of the most notable points: - According to regulation, HELOC lenders may only reduce a borrower’s line of credit under certain circumstances. - Lenders [...] [...more]
