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]
Most home equity lenders claim to have some sort of appeal process for borrowers facing line reductions. According to a Wall Street Journal article, Bank of America is willing to reconsider their HELOC freeze decisions. If the borrower can prove that their property has not lost as much equity as believed, the lender may be able [...] [...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]
