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WaMu calling in HELOCs.

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xmtpedprl

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Dec 6, 2005
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Hope you all had a peaceful & merry Christmas!

Now back to the grind...

I understand that HELOCs are a risk, as their terms can change in a heartbeat (and it's right there in black & white!), but I didn't actually think it would be like this. And while it's just a rumor, if anyone here had experience - or a connection who does - with this sort of thing I'd love to hear of it. (And no, I don't have one, but man, you all know how many of the owners we visit do.):

http://www.tickerforum.org/cgi-ticker/akcs-www?post=21464

...and...

http://portlandhousing.blogspot.com/2007/12/wamu-to-cut-heloc-limits-without-notice.html

I mean, if they actually *did* this, my goodness, how bad is it going to get in 2008...?

Thanks,

Dave...
 

Tony V

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Mar 29, 2005
Professional Status
Certified Residential Appraiser
State
New York
Didn't see anything on the Broker Outpost on it...
 

Couch Potato

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Mar 15, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
What WaMu is actually doing is freezing the credit line of customers whose FICO score has dropped significantly. Basically they are re-evaluating their outstanding loans and credit limits.
 

xmtpedprl

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Senior Member
Joined
Dec 6, 2005
Professional Status
General Public
State
Florida
Maybe...

I've been following the threads for this subject, and the folks who appear to be the most literate - and I'll take those to be a tad reliable in the IQ department - are suggesting that this will force people to pay those bad boys down. How they would do it is up to them, selling what they own, etc., but they will have to pay them down.

If this is going to be the case it sure puts pressure on folks who, well, probably shouldn't have had that 'stuff' in the first place, OR, it means that those having obtained those HELOCs for no other reason than because they desperately needed them are going to be in a real tight spot.

Dave...
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
What WaMu is actually doing is freezing the credit line of customers whose FICO score has dropped significantly. Basically they are re-evaluating their outstanding loans and credit limits.

This makes sense.
A pre-mature blanket call doesn't make sense- could have the same effect as creating a run on one's own bank; except here they presumably have performing loans which will then have to be put into a non-performing category if the borrower can't pay it off on demand.

But, who says a decision must make sense?
 

xmtpedprl

Thread Starter
Senior Member
Joined
Dec 6, 2005
Professional Status
General Public
State
Florida
I believe there may be (and I could be out in left field on this) some kind of federal guideline with regards to assets and financing extensions that lenders must be sensitive to in order to keep their status clean. If this balance becomes a bit askew, and now is the time for such things to *be* askew, then there could be trouble.

Again, the 'word on the street' is that this will be announced tomorrow, and even my contact at WaMu wouldn't *deny* it, but nor did this individual confirm it.

Who knows, but the wait won't be long.

Dave...
 

Mountain Man

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Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
One more reason I chose to bank with small LOCAL banks. :)
 

Carnivore

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Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Do you think they may have lost confidence in there stable of AVM's?
 
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