HelocBasics » National City

Emergency Rate Cut – Feds Slash Rates By Half Percentage Point

Jamie — Wed, 08 Oct 2008 18:17:12 +0000

Good news for HELOC borrowers – thanks to an emergency federal rate cut, your home equity bill may be getting smaller. Today, the government slashed the federal funds rate by half a percentage point.

The New York Times reports:

“The Fed said in a statement that, because of weakening economic activity, it had cut the Federal funds target rate by half a percentage point, to 1.5 percent. It also cut its discount rate by the same amount. The vote was unanimous…

Federal Reserve officials said Wednesday’s action was the first time ever that the Fed had coordinated a reduction in interest rates with other central banks, though the United States has periodically joined with other countries to intervene in currency markets to stabilize foreign exchange rates.”

Major banks including National City, Wells Fargo, and Wachovia followed suit by lowering their prime lending rates to 4.5%. The prime rate is the rate that is given to the most credit worthy borrowers.

For more information on how this may affect you see: Will Federal Rate Cuts Affect Your HELOC APR?

National City Now Paying Borrowers to Close Home Equity Lines of Credit

Jamie — Fri, 05 Sep 2008 07:15:35 +0000

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 line and by writing customers a $200 cheque.

“We are giving customers an opportunity to close their lines without incurring termination fees and then we give them a reward to thank them for their business,” said National City.”

The National City plan is certainly more generous than the lenders who continue closing HELOC lines without notice or option. Although most customers won’t want to close a line for $200, this can be a good deal for customers who were already planning to close a line. Instead of paying the usual $350 cancellation fee, they can walk away with a check.

National City seems to be offering this deal to only some borrowers. But, it is not yet clear what the recipients have in common.

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National City Lender Faces Probation

Jamie — Tue, 10 Jun 2008 07:29:43 +0000

National City, a major HELOC lender, is now on a form of probation with federal banking regulators. Reuters reports:

“The banking subsidiary of National City Corp has signed a confidential memorandum of understanding with U.S. regulators, promising to address its rising amount of bad loans, a source familiar with the matter said on Monday.

The memorandum signed by the bank and the Office of the Comptroller of the Currency requires the bank to improve what examiners see as potential problem areas.”

If National City does not improve, it may become subject to formal sanctions.

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