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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]
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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]
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If your HELOC is recorded as a revolving line of credit, it may be difficult for you to take out a new mortgage or other type of loan. Holding a balance on a HELOC listed as a revolving line on your credit report will often reduce your credit score. USA Today explains: “…Watts says, “It isn’t always [...] [...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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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]
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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]
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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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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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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]
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If your home equity line of credit is reduced, you may have an even bigger problem on your hands. Reduced HELOCs often result in decreased credit scores, which can make it more difficult to take out loans, qualify for credit cards, or even refinance your home. Holden Lewis reports: “Your bank sends you a letter, telling you [...] [...more]
