Team Rielly: As Another Reminder, Don't Get Burned by HELOC Freeze!

Dear Friend of TEAM Rielly,

If like many you are not aware, there's a growing trend among big bank lenders that I feel compelled to advise you about.

Several major lenders, like Bank of America, First Horizon, Countrywide, National City, and more are freezing withdrawals from Home Equity Lines of Credit (HELOCs) - and I don't want you to be caught off guard by this development.

Back in August 2007, I was alarmed this might happen, so I took personal measures and also provided professional intuition and warning to many.  Among other notices, I wrote about it on my Blog page: IN THE NEWZ: Some Banks Freeze Home Equity Lines of Credit!  If interested, please click and read about my gaze into the Crazy 8 ball.

As Another Reminder, Don't  Get Burned by the HELOC Freeze
HELOCs, though secured by your real estate, are treated by lenders as consumer credit. And just as a lender can revise the terms of your credit cards, or even cancel them, the same can be done with your HELOC.

Previously, HELOC withdrawals were usually only frozen for reasons such as bankruptcy, declining credit and payment problems.

While these events can still cause a freeze, there's another factor that lenders are considering more often today: the value of your property. You should be aware that the lender retains the right to suspend or reduce the line of credit available (whether right or wrong) if they believe your property value falls below the appraised value used to originate the loan. Even if those customers were current on their payments! Lenders are actively assessing properties and then suspending access for account holders who have seen a downward slide in their home value.

As a reminder, "Home equity is not the same as cash in the bank. Only cash in the bank is the same as cash in the bank!"  Cash is still KING!

If you're in a market or area that has seen real estate values decline (or not in some cases), then access to your HELOC may be at risk. Your financial security, success and peace of mind are my highest priority. So, if you are so inclined, call me to discuss your options and possible strategies in this rapidly changing marketplace.  Finally, if you know anyone who might need the type of quality mortgage education, services and home loan products that my team and I provide, please let me know!

Sincerely, Your friend in the mortgage industry
www.TeamRielly.com