Chase Manhattan Bank is currently facing a class action suit after freezing a few too many HELOC lines. The lead plantiff, Mary Yakas, filed the suit after her HELOC was frozen in late 2008 based on Chase’s Automated Valuation Model.

Courthouse News Service reports:

“Yakas filed a class action, alleging breach of contract and unjust enrichment. She said Chase breached the HELOC in three ways: by failing to obtain an appraisal by a licensed appraiser, by using the unreliable AVM to assess her property value and by charging her a $20 annual fee after it suspended her credit line.”

It’s about time that someone stood up for HELOC borrowers’ rights. Lenders can certainly limit or even freeze HELOC lines if there is not sufficient equity remaining in a property. However, it is unfair to freeze HELOCs in batches or based on these so-called “automated valuations” that do not require any actual appraisals or personal considerations.

photo credit: The-Lane-Team

See Also:

HELOC Freeze Help

Tags | Chase, Heloc, heloc freeze, HELOC Lenders, home equity line of credit, mortgage crisis