Do you or your clients have a "Home Equity Line of Credit" (HELOC)?
As national house prices continue to decline from the heady records reached during the housing boom, Banks have tightened their lending criteria for new loans. That is a good thing, within reason. Buyers can no longer purchase homes with no-money down. Another good thing, within reason.
But what about those proprty owners who have HELOC's? Many families had budgeted to use those funds for schooling, remodelling their properties, or possibly consolidating their debt.
I've had several clients call me to say their lender had "frozen" their HELOC. While it makes sense for the banks to limit their exposure to the value of the underlying property, is it fair that they can suddenly "pull the rug" from under their clients?
It's a difficult balancing act - and unless it's handled with extreme care by the lenders, I think many more families will find themselves in unexpected financial trouble.
Comments(7)