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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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Some baby boomers may not be able to retire as soon as planned due to limited savings and large home equity line withdrawals. CNN Money reports: “The housing bubble had another perverse effect on our planning: It led us to save less. “Many people thought, ‘I’m wealthier, I already have a big chunk of my nest egg [...] [...more]
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According to reports, some home equity line of credit lenders are freezing accounts based on declining credit scores. The Arizona Republic reports: “It also might be smart to check your credit report, evaluate your credit score and make fixes if necessary. Sometimes a drop in credit quality triggers a freeze, not just a declining home value. Unfortunately, a [...] [...more]
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Last week, I posted about the letter from the Office of Thrift Supervision warning HELOC lenders to follow government regulations. Hopefully, this instruction will encourage banks to avoid freezing individual home equity lines of credit without considering a borrower’s unique circumstance (for example, a home with a high value in an area that is generally declining). IndyStar [...] [...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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According to some reports, Wachovia has continued freezing home equity lines of credit for several weeks. The Philadelphia Inquirer explains: “Wachovia credit-line customers whose home equity has declined 50 percent or more received letters in the last several weeks saying that their credit lines had been reduced or blocked, Wachovia spokeswoman Barbara Nate said. “Our rationale is that [...] [...more]
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Yesterday, the Office of Thrift Supervision (a part of the federal government) urged banks to follow the proper regulations when freezing home equity lines of credit. They explain: “Declining home prices in parts of the country are prompting some institutions to curtail, suspend, or terminate customers’ home equity line of credit. Today’s guidance emphasizes that institutions taking [...] [...more]
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High gas prices and a struggling economy aren’t the only reasons for declining car sales. Many would-be buyers aren’t purchasing new cars because they can’t withdraw the cash from their their home equity lines of credit. Detroit Free Press reports: “The home equity crunch hurts consumers and consumer-driven companies, including Detroit’s automakers. Art Spinella, president of CNW Research [...] [...more]
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Thousands of home equity line of credit (HELOC) customers have received notice that their accounts have been frozen. Many are still wondering if it is legal for banks to freeze HELOCs. The short answer: Yes. Banks may freeze home equity lines. However, they can only do so under specific circumstances. The Oregoneon reports: “In general, banks are prohibited [...] [...more]
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Just a few years ago, borrowers commonly withdrew money from their home equity lines of credit to pay for costly home remodeling projects. Since home values were going up so quickly, many assumed that the granite countertop and spa bathtub would pay for themselves with an increase in equity. Looks like those days are long gone. Home [...] [...more]
