Heloc Freezes Spread Fear And Panic.

Millions of Americans Waking Up To The Reality

That Their Homes Have Lost Value.

Major mortgage lenders have been mailing letters to home

Owners telling them that their Home Equity Lines Of Credit (HELOC) have been shut down.

Lenders have been quietly accessing and reappraising home values. Lenders are now exercising their rights to ‘shut off’ or in some cases terminate existing HELOCs. They do this when they believe that the property has lost value. This is happening across the country to borrowers with stellar credit as well as those will troubled credit.

When this happens there is no clear path to regaining access to your HELOC. All those expense closing costs and points for that HELOC you thought you had….lost.

This is a partial list of the Mortgage Lenders who are sending Heloc freeze letters now.

Bank of America- Heloc Freeze pending

Countrywide-  Heloc Freeze already sent

Chase- Heloc Freezes Sent

CitiGroup-  Heloc Freeze under review

National City- Heloc Freeze Sent

Suntrust- Heloc Freezes

USAA Federal Savings-  Heloc freeze status unknown.

Washington Mutual- Heloc Freeze Likely as acquisition by chase nears

If you need the HELOC money for some upcoming expense we suggest you take it out now before its too late.

How Can My Lender Freeze My HELOC?

What Can You Do Now……..

You just received notice in the mail that your Home Equity Line Of Credit is frozen or best case the amount you can borrow is just reduced.

The money in your HELOC was going to go to pay for college tuition, a new car or maybe health expenses. You paid hundreds and sometimes thousands to secure the HELOC in the first place…

What can you do now?

Short Answer. Nothing.

Lenders has the right to reappraise your home at any time. If they think your home has depreciated they can cancel your HELOC.

They are now doing this across the country. Your credit score does not play into this decision.

Lenders can cancel (or call the loan due) when they suspect:

1. Fraud (in application)
2. You do not meet repayment terms (ie lates and non- payment)
3. Your actions adversely affects collateral (insurance waste taxes and like)

Lenders Can Freeze or reduced HELOCs when:

1. They determine the value of property declines
2. They reasonably believe you will be unable to fulfill your payment obligations
3. You become in default of material obligation.

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