I just found this article on Fool.com. I read the articles here sometime but I don't always pay too much attention to their stock recommendation because they sell advertising and newsletters and such that I believe taints their opinions.
This article talks of the writers Home Equity Line of Credit. He says he always counted on using it in the event of an emergency. He received a letter recently from Citi Bank that his HELOC had been suspended because they believe the value of his home had decreased, thus, affecting his line of credit.
http://www.fool.com/investing/dividends-income/2008/08/19/your-house-is-not-an-emergency-fund.aspx
Hi Bill,
Yep, we're beginning to see that all over the place. It's happened here too in So Cal.
Hi Bill, I ditto Lynda's comments and would that some folks have been found to be in a real lurch. They are in the middle of remodeling on to find the funds no longer in place. For some it will be necessary to do a full re-fi and I suspect many will not qualify. These HELOC offers were abundant in in So Cal and too many relied on them turning their homes into ATM machines.
I have several clients that have purposely maxed out their HELOC just in case this happens to them. I thought they were crazy at first but here it appears to be turning into a reality.
Great Blog-
Keep on blogging.
All the best and continued success.
Bill
Bill
With the current values in Florida we are seeing very little actively in the home equity lines of credit
Good luck and success
Lou Ludwig
This is the sort of thing happening all over it seems. Likely we will see more of it also.
More and more banks are doing this and these people that were using this as a credit card are now finding themselves scrambling to make other arrangements.
I think rather than suspending all the accounts, I think the banks should have looked at lowering the amounts they were letting borrowers borrow and who has had a good payment history.