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If your HELOC has been frozen, getting your original limit back is a long shot. However, you can try to “thaw” your frozen line by requesting a new appraisal. A recent CNN Money article explains: “Call the lender’s customer service department and ask if it has an appeals procedure. “You generally will need to demonstrate that [...] [...more]
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Last month we published an article identifying the lenders who were canceling or freezing HELOC lines. Now, it’s time for an update. Lenders Freezing HELOC Lines Countrywide (leading the way since January with over 120,000 notices sent) Wachovia (started sending most letters earlier this week) Washington Mutual IndyMac Bank Capital One (Greenponing Mortgage Unit) Bank of America Chase CitiGroup National City Suntrust USAA Federal Savings It’s important to [...] [...more]
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One of the biggest complaints of homeowners hit by the HELOC freeze is that most lenders have not done new property appraisals. Instead, they’ve determined lower property values by using the automated valuation model (AVM). Today, Tanta of the popular Calculated Risk blog explained that homeowners should not be surprised - especially because most HELOCs were [...] [...more]
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Earlier today, Wachovia announced that it will be freezing HELOC lines for many current customers. Market Watch reports: “Wachovia Corp. said on Monday that it’s limiting homeowners’ ability to tap home equity lines of credit that they haven’t used yet as the giant bank tries to cut its exposure to the broadening housing crisis. [...] [...more]
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Several borrowers are reporting that Washington Mutual (WaMu) is still sending out HELOC freeze and reduction notices. A Los Angeles Times blog gives this account: “Last week a Realtor in San Diego wrote, ‘Just after I made a large payment of $10K (only $350 payment was due), they took away all of my credit line. [...] [...more]
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Earlier today, Market Watch reported that six banks may lose a whopping $50 billion on home equity loans by the end of June. Declining real estate markets mean many HELOC / home equity loan customers now owe more than they can generate via selling their properties. Which banks are hit hardest? “Analysts slashed estimates for Merrill Lynch, [...] [...more]
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Fannie Mae (the largest national provider of home loan funds) recently issued new rules that will affect many HELOC customers. The Boston Globe reports: “Fannie Mae will no longer allow homeowners to refinance loans it either owns or has packaged into bonds at typical loan-to-value ratios in areas with falling home prices if they’re going to [...] [...more]
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During the real estate boom, lenders would regularly set HELOC caps above the home’s current value. Now, they’re reconsidering. MSNBC reports: “Lenders periodically conduct “portfolio reviews” to examine whether the assets (in this case homes) against which they have extended credit have held their value, says Richard Hagar, an appraiser at American Home Appraisals in Mercer [...] [...more]
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As the real estate market is declining, so are the earnings of major HELOC lenders. Many home equity borrowers now have credit lines higher than their homes’ current value. When these customers default, the HELOC lender often has difficulty recovering any of their money. The Wall Street Journal reports: “David Hilder, a banking analyst at Bear [...] [...more]
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According to the Wall Street Journal, home equity rates have been falling steadily for the past 6 months and may fall further based on yesterday’s federal rate cuts: Rates on home-equity lines of credit have dropped to 6.27% from 8.25% since September of last year, according to Bankrate.com. Partly as a result, the amount that homeowners [...] [...more]
