Heloc Freeze

[Debij310]

I talked to two people today who have had their HELOC's frozen. Two different lenders - One was First Horizon, the other Chase. Kind of scary since our market is not declining and that was the reason given for the lock. According to the people I talked to, AVM's were used to determine their homes NEW and LOWER market value. I know that Citi and Countrywide did something similar a few months back. They both got their letters yesterday. Coincidence? Has anybody else heard news of this in the past few days and if so, who were the lenders. Both of these people needed to have appraisals done (at their expense) to prove the value of their home had not declined. Happy for the business, but if this practice is wide spread it could make things even worse. Comments?

 

[Alison Swain]

I think it's been going on for a couple months now.....

 

[CANative]

Does this mean no more small loans until heloc freeze'is over?:icon_mrgreen:

 

[Karl]

Does this mean no more small loans until heloc freeze'is over?:icon_mrgreen:

AH but wait you can still borrow ample amounts of money on rhe Credit Card!! Ah HUH & the intrest is the only thing that would be different. Everyone that has frozen Heloc offers Various credit Cards & have NO problem having you use them to obtain money.

Anyone with a frozen loan called & asked what to do?? Betting the answer is Credit Card Application.

 

[Caligirl]

AH but wait you can still borrow ample amounts of money on rhe Credit Card!! Ah HUH & the intrest is the only thing that would be different. Everyone that has frozen Heloc offers Various credit Cards & have NO problem having you use them to obtain money.

Anyone with a frozen loan called & asked what to do?? Betting the answer is Credit Card Application.

I expect credit card interest rates to skyrocket in the next year or so.

 

[TJSum]

Many people have noticed the rise in Credit Card offers the past year or so coming through the mail. Some financial "experts" stated the banks are trying to make up for the reduction in mortgage lending with credit cards. Talk about jumping out of the kettle into the fire...

 

[Green Hornet]

I completed an appraisal last week for a borrower who's HELOC had been cut in half. The borrower had been remodeling expecting the money to be there when needed. He was charging expenses on his CC to get the mileage and then paying it off with draws from the HELOC.

He called the bank to ask how much was still available and was told just a few thousand. He about flipped.

No one seemed to know how the bank determined that the HELOC needed to be cut. The bank did have a process to challenge the decision, hence the new appraisal.

 

[Restrain]

If I was a lender and made a loan in certain areas (CA, FL, NV) for equity, I'd be looking real hard at these equity loans as well. Just prudent to freeze the amounts, etc. It may force people who are remodeling to actually get a home improvement loan instead of a HELOC.

 

[rbrix8]

Chase just locked my heloc last week and I called to request a fixed rate and they obliged by offering me a rate of 11.30%...what a deal! I decided to stay with the variable which is currently around 6%...they tempted me though!