HELOC Funding Reviewed By Most Lenders
As of late last year, delinquencies on HELOCs were up 47% according to Economy.com. And, the numbers are expected to be worse in 2008.
In response, Countrywide has already suspended an estimated 122,000 lines, many in high-foreclosure-rate states, and USAA has frozen or reduced some 15,000 accounts.Bank of America (BAC, Fortune 500), Chase (JPM, Fortune 500) and Citibank (C, Fortune 500), among others, are following suit.
While not all HELOCs will be frozen or downgraded, lenders will surely scrutinize every account, including yours.
Areas where housing prices have fallen by 10% or more are prime targets for a lender to consider freezing their funding of additional HELOC draws. Because of new lending standards, your HELOC could also be in danger if you bought your home in the past few years with little money down.
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