So I get home today and check the mail. Low and behold I have a letter from Chase bank. My HELOC has been cancelled. They say in the letter it's because the value of my home has dropped 20%. As a note, we took out this HELOC 5 years ago. I am shocked. 20% less than 5 years ago? How in the world did they get that number? They used their "industry standard proven valuation method" whatever that is. They invite us to pay for an appraisal and if we can prove to them that our house has value then they will reconsider the HELOC. Now before you ask, yes we have borrowed some from the HELOC and paid it every month.
So, what to do now. Well we looked at our MLS in our area and found out some unbelievable trends. The comparable houses in our township are still up from 5 years ago. The average home price in our area dropped about 7% from last year (the high), but not 20% from 5 years ago. A house that is the same size and bedrooms as ours settled for more(about 7%) than our appraisal from Chase when we opened the HELOC. Now the real kicker. Are you ready for this one? In the next township over, 2008 home prices set a record. That's right. The home prices in 2008 did not go down one bit. They went up to a record setting high. So what is Chase's problem? Where do they get this mysterious data from? Any mortgage people out there want to comment?
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