Warning to self-employed appraisers with Chase Heloc's

[AJL118]

If I am a lender and have a big exposure to outstanding HELOC balances, I have a major problem sleeping. Defaulted outstanding balances have taken a bunch of these guys down. An easy way to remove some of the pressure is by shutting down availability of credit lines. HELOC lending was a joke from the beginning based on phony baloney "equity". People don't have real equity until they SELL their properties, the deals are closed, and they have their net proceeds. Paper equity (which HELOCs are based on) is a figment of whomever believes that farce. So, I guess I don't blame Chase on this one or any other lender that wants to bail out of an untenable situation. As a lender, when you have a moving target that is your collateral for XYZ HELOC borrower, what would you do? Close your eyes, hold your nose, and print out the check? Or, slam the HELOC lending door shut. I think you know the answer.

 

[Conservative in Virginia]

National City did a wide spread suspension of their Heloc's early last year. An aquaintance (Broker) who worked there relayed that the news came down from corporate and he and his buddies called all their customers and told them to run out and cash out their HELOC's quick! I don't think it mattered if you were self employed or not... equity or NOT.. they just shut em down.

Fake equity... YES... false appreciation YES... Reality is HERE>

 

[Green Hornet]

It appears that Chase is supending all Heloc's if you are self-employed, regardless of current income. I am even a Chase approved appraiser, normal years might do a couple hundred appraisals, no matter. I have a Heloc with Chase opened spring last year with 905 fica and 230K gross, home appraisal at $575,000, equity almost $300K. Just notified me that Heloc was "supended" because they checked my taxes for last year end because Im self-employed, and it showed a decline in income for 2008. (DUH). Even though current bank statements indicate current year-to-date income is almost twice ALL of last year (which was bad I admit), due to all the "Obama Bailout Re-fi's", they still wont re-instate loan and say I will need to "re-apply". Right.. They just want more points and a higher rate..If you are self employed with one of these loans-get your money out NOW or lose it. Problem with big banks, we are all just another number no matter how safe you think you are...Has anyone experienced this kind of poor treatment by their bank?

Gary,

Just curious as to how they accessed your tax return? Did you provide it to them?

 

[Shelgard]

4506t

Had to sign a 4506T IRS form so they could "update" my account. Chase sent out a yearly update form which required it if you are self employed

 

[DTB]

If I am a lender and have a big exposure to outstanding HELOC balances, I have a major problem sleeping. Defaulted outstanding balances have taken a bunch of these guys down. An easy way to remove some of the pressure is by shutting down availability of credit lines. HELOC lending was a joke from the beginning based on phony baloney "equity". People don't have real equity until they SELL their properties, the deals are closed, and they have their net proceeds. Paper equity (which HELOCs are based on) is a figment of whomever believes that farce. So, I guess I don't blame Chase on this one or any other lender that wants to bail out of an untenable situation. As a lender, when you have a moving target that is your collateral for XYZ HELOC borrower, what would you do? Close your eyes, hold your nose, and print out the check? Or, slam the HELOC lending door shut. I think you know the answer.

I can agree they were idiots going in, now they are being idiots on the way out. Had one 15K HELOC closed in Jan 2009 on a property worth 450K, no other loan balance.

 

[AJL118]

Quote: I can agree they were idiots going in, now they are being idiots on the way out. Had one 15K HELOC closed in Jan 2009 on a property worth 450K, no other loan balance. Unquote

I'd say that was part of a bail-out, blanket decision. With a no-brainer like that, don't you have a near relative who needs a better yield than 1.00% on his/her CDs? Looks like the risk is better than the government.

 

[DTB]

Quote: I can agree they were idiots going in, now they are being idiots on the way out. Had one 15K HELOC closed in Jan 2009 on a property worth 450K, no other loan balance. Unquote

I'd say that was part of a bail-out, blanket decision. With a no-brainer like that, don't you have a near relative who needs a better yield than 1.00% on his/her CDs? Looks like the risk is better than the government.

I just paid it off. Point is they are just about ALL nuts.

 

[Webbed Feet]

<.....snip.....> Right.. They just want more points and a higher rate..If you are self employed with one of these loans-get your money out NOW or lose it. Problem with big banks, we are all just another number no matter how safe you think you are...Has anyone experienced this kind of poor treatment by their bank?

I have to rain on your parade here. Simple question...

The money of whom?

America has been drunk for well over a decade or more at a giant "Debt Party" with endless kegs to keep drinking out of. Now, those who got drunk don't like the hangover and want to blame their drinking on the beer supplier. Are you a minor that was being illegally served? Did you not read the contract you signed for the loan(s) and agree to it or them? Since when is any money source obligated to permanently embrace your entitlement?

"Do not a lender or a borrower be." Funny how many people want to ignore those last four words and rather instead believe they are entitled to credit as if it is some inalienable right granted them by living in the U.S.

 

[Shelgard]

Wait

You guys are missing the point. My arguement is not about whether or not Heloc's are a good thing. Im saying if the bank and I have a good loan, based upon good credit, why mess with me? Close the bad loans or ones that are already in default. Why **** off a good customer in good standing? Wait till I stop makeing payments, then come after me..

 

[JT1974]

You guys are missing the point. My arguement is not about whether or not Heloc's are a good thing. Im saying if the bank and I have a good loan, based upon good credit, why mess with me? Close the bad loans or ones that are already in default. Why **** off a good customer in good standing? Wait till I stop makeing payments, then come after me..

I would be willing to bet regulators had a large part to do with your current HELOC woes. Regulators have been forcing banks to get their books in order lately and part of that is to whittle down their amount of available credit.

I do appraisals every week for properties that are on the verge of foreclosure. The property owners have never missed a payment, but all of the sudden, their lenders have decided they don't want to renew their commercial loans. Lenders created the problem during the "boom" and now they are exacerbating the problem by witholding credit from creditworthy borrowers.