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.

Other mortgage lenders, including Washington Mutual, Countrywide Financial, and Indymac Bancorp, have also been cutting home equity lines aggressively, Fred Cannon, an analyst at Keefe, Bruyette & Woods, wrote in a note to investors on Monday.”

HELOC freezes and cancellations have been happening since January and show no sign of stopping. Your lender may choose to freeze your line even if you’ve paid every bill on time and have otherwise fulfilled your obligations as a borrower. If you plan on using your HELOC this year, you may want to withdraw money now to avoid being surprised by an unexpected line freeze.

See also:

Strategic Withdrawals to Avoid the HELOC Freeze

What to Do if You’re Hit by the HELOC Freeze

Tags | Heloc, heloc freeze, lenders, Wachovia