In the last year, terms and qualifying requirements on home equity lines of credit have become extremely strict. Rightly, many unqualified borrowers are now unable to take out home equity loans. However, many qualified borrowers are also suffering under the new requirements. A recent American Banker article explains that lenders should avoid punishing those who would [...] [...more]
According to some reports, Wachovia has continued freezing home equity lines of credit for several weeks. The Philadelphia Inquirer explains: “Wachovia credit-line customers whose home equity has declined 50 percent or more received letters in the last several weeks saying that their credit lines had been reduced or blocked, Wachovia spokeswoman Barbara Nate said. “Our rationale is that [...] [...more]
Even the wealthy have been affected by home equity line of credit freezes this year. Despite a good job and a solid income, many have faced HELOC reductions due to the declining value of property. The Wall Street Journal explains: “Wall Street firm Morgan Stanley added some of its well-heeled clients to the long list of customers [...] [...more]
Thousands of Morgan Stanley HELOC customers received notice that their lines had been reduced or frozen this week, according to sources on the inside. Bloomburg.com explains: “Most of the clients had properties that have lost value, according to the person, who declined to be identified because the information isn’t public. The New York-based investment bank will review [...] [...more]
Home equity lines of credit (HELOCs) are not faring well these days. But, lenders like Wells Fargo have devised a way to make these bad loans look good to investors. ReportonBuisness.com explains: “Wells Fargo owns a huge pile (almost four times its total capital) of Home Equity Lines of Credit, or HELOC loans. HELOCs are second-lien loans, [...] [...more]
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% at the [...] [...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 some IndyMac [...] [...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 and became [...] [...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 rate [...] [...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 for borrowers [...] [...more]
