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National City is now offering some customers a $200 check if they agree to close their unused home equity lines of credit. Financial Times reports: “The bank’s initiative, which was launched at the end of July, encourages National City customers to surrender their unused home equity lines by waiving fees it would normally charge for closing the [...] [...more]
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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]
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Before the bubble burst, Citicorp spent a whopping billion dollars on it’s “live richly” advertising campaign - encouraging homeowners to tap their equity via HELOCs. The New York Times reports: “The advertising campaign, which cost some $1 billion from 2001 to 2006, urged people to lighten up about money and helped persuade hundreds of thousands of Citi [...] [...more]
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Fewer home equity line ads were sent out during the beginning of 2008, most likely due to the declining HELOC market. Market Watch reports: “New data from Mintel Comperemedia shows mortgage and home equity lenders still plagued by faltering home sales, credit woes and consumer anxiety. The direct marketing-tracking firm reports that these lenders have reduced direct [...] [...more]
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According to a new Freddie Mac report, homeowners took out less money from their home equity lines of credit this year than they did during the same period four years ago. CNN Money reports: “The amount of money Americans pulled out of their homes is at a four-year low as homeowners battle falling home values and stricter [...] [...more]
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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]
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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 planned [...] [...more]
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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 over one in [...] [...more]
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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 are permitted to [...] [...more]
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Recently, there’s been a lot of talk about the lack of equity in American homeownership. While home equity loans such as HELOCs allowed people to pay for college and afford property improvements, they were also a drain on the economy. Hot Property reports: “…in at least 63 years, the amount of equity we have in our homes [...] [...more]
