How many homeowners in the United States have some form of a home equity loan? Millions. How many of these individuals do you think have used this loan to increase the size of their home, build an outdoor structure, or to completely remodel the entire property? Millions.
I have a friend that does. He had taken out a home equity line of credit so that he could add on to his home 1640 sq. ft. Originally, the house was only 1200 sq. ft. and that was not completely fitting all 5 members of his family. Over the course of a year, they have added on 3 bedrooms, 2 full bathrooms, a front room, a covered wrap around porch, had all new windows, siding, 2 new heating and cooling systems installed, and roofing put on the new and existing part of the house. Yet, he recieved a letter from the bank saying that he was not able to draw from their heloc any longer because the property no longer appraises for what it needs to. They said that they had an individual perform a drive-by BPO and with this BROKER PRICE OPINION the home was valued much lower than it was before he got the loan to begin with. Now, I understand that this is a way for the banks to try to prevent facing anymore short sales or foreclosures, but on the other hand, he had a closing at their bank, paid the fees for obtaining this loan for this amount, has never been late on any payment, and has a credit score of 787. I could understand this process a little bit more if they had individuals that were behind on a payment or two and were facing the short sale or foreclosure process. The other part of this that truly bothers me is that this broker, hired by the bank, performs a drive -by BPO that is inaccurate. It seems to me that if the banks wanted a real appraisal to take place, that my friend could've easily been called to have this set up. The appraisor could come inside, and thoroughly give an accurate opinion(appraisal), but the banks will say they don't have time for this and would cost them more to have this service performed. The moral of this story is they would rather cut you off of your loan, and if you think your home's value is higher, then you have to hire your own appraisor, another out of pocket expense, to get the heloc back.
I am a real estate agent and I know for a fact that homes of half the size are getting loans here in Greenfield, Indiana for the same amount as they have on theirs. So this is a warning to everyone considering doing business with the banking system, watch out, they might want to recall entire loans next, or are they?
Comments(0)