There has been a move by the banks and credit unions that has some people very upset. The banks have reduced the amount of a persons heloc or line of credit secured by their home in certain states. This has been done without regard to an individuals home value, but across the board based on where you live (Florida, California, New York to name a few). And this has been done without notifying the people who have these helocs until they try to use some of their money to remodel or whatever they are using the money for.
This is scary to think that banks can do whatever they want and not have to answer to anyone about their actions. There has been a lawsuit filed in New York and it is possible that it will be a class action suit against several banks for this under handed action. This is having a serious affect on resales, based on a wholesale reduction of home values without the benefit of individual appraisals. If you have clients is states where overall home values have dropped significantly and they have helocs, have them check with their lending institutions to see if they have been affected.
I hope this information will help anyone out their in these areas with helocs. Don't let these banks make you a victim.
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