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i have no 1st mortgae and paid cash for the house 3yrs ago.I obtained a heloc with a line of credit for $350,000 and used $109,000 up till the present. The bank had already reduced the line by $60,000 due do fall in real estate market. However last week they suspended the whole w/o informing me and I was paying all my bills and was never late on any payments. Except for some disputed medical bills I was up to date on all my credit card bills and car payments etc. So now they claim I am a credit risk and took $183,000 available line away just like that .I believe they were hasty and rash .Do I have any recourse?

carlpruitt · Posted: Sun Nov 09, 2008 7:30 pm Post subject:

Unfortunately, probably not. The provisions for doing so were probably buried in the original documents you signed when you opened the credit line.

Your personal credit situation was probably not a consideration in their decision. It probably has more to do with the bank keeping their numbers in line for regulators and the risk they have determined for values to fall further in the area.

smithsussane · Posted: Sun Nov 09, 2008 7:33 pm Post subject:

Hi Guest!

Welcome to forums!

I think you should have a word with the lender and explain the whole issue to them. As you were never late on payments, may be they can consider your situation. You can even take the help of a mortgage attorney to deal with them.

Feel free to ask if you have further queries.

Sussane

kpatrick · Posted: Sun Nov 09, 2008 8:24 pm Post subject:

I really feel that all banks are looking to decrease all of their risk exposure, and with property values declining in most areas, they are lowering you LTV to match the decrease in area values. It is just a real challenging real estate market that we are experiencing, and only time will heal it. So just keep paying your bills on time and you will be fine.

helping_user · Posted: Mon Nov 10, 2008 2:47 am Post subject:

Hi guest,

I agree with the other posters here. The lender must have given you a written statement regarding under which situation he can suspend the line of credit. Just check out the loan documents.

I think KPatrick has the right answer. It's because of the gradual decline in home prices that lenders are reducing the loan to value ratio. And that's the reason the lender has suspended your line of credit.

Thanks.

gmakerley · Posted: Mon Nov 10, 2008 8:57 am Post subject:

sussane...suggesting that he secure the services of a "mortgage attorney" isn't appropriate here. the lender has the right to cancel a line of credit at just about any time. if our original poster goes back to read his documentation, i'm sure that will be clearly laid out. furthermore, i am unaware of anyone who considers "mortgage attorney" as a predominant line of work in the legal field. real estate attorney abound, but that includes far more than simply mortgages. suggesting an attorney work with the poster to investigate what the lender did here isn't productive, i'm afraid. there value of services rendered would need to justify bringing in legal counsel, and i'm quite sure there's no justification here. please beware of what you're recommending; there's a great lack of sophistication rampant in the public, and some might even believe it worthwhile to try to find a "mortgage attorney" where one doesn't even exist.

to the original poster - kpatrick is right on, and carl pruitt may have stated it in a different manner, but he's right as well.

jveenstra · Posted: Mon Nov 10, 2008 10:45 am Post subject:

Many bankis in many states have been and are freezing existing homeequity lines of credit. If you want the security of a line available, check with local banks and get a new one, even if the new line is noty as high as the old one.
Banks are taking too many lossess on real estate loans in general. So, they are taking action to lessen the possibility of more losses. Just because you have excellent credit is no reason for the bank to leave your line open. What the bank does not know is whether or not you will lose your job tomorrow. The bank does not know if you are or will be keeping your credit excellent because you are or will be paying your bills with your home equity line. So, they do not take a chance on the future, especially not knowing iof house values will go lower. National banks use automated valuatioj model;s to determine the value of your property. Those values could be high or low. A local lender who does home equity lines would bettre know if worth your while to get a new line. In New Jersey, HELOCs are typically free, so, no costs to find out.

Guest

I've been a bank customer for more than 30 years and have no debts; yet Chase Bank did the same thing to me. I have closed my safe deposit box and am now in the process of using up my checks and drawing down my checking account. I am opening a new account with a local credit union where I will transfer my direct deposits and debits. When all that is complete, I will personally walk into my Chase branch and give them a choice: either reinstate my HELOC or close my remaining accounts.

gmakerley · Posted: Sat Oct 17, 2009 9:57 am Post subject:

you can certainly visit your branch and make those demands, but the people there will probably shrug their shoulders. better to simply close out your accounts and move on - credit unions are more liberal in every way anyway.

sunnyca2009 · Joined: 04 Aug 2009 Posts: 1731 35.55 Dollars($)

Thats absoutley correct

The big banks may not really worry much abotu that, if you walk in and close the account

probably call and cancel

Guest

I have line of credit in the amoynt of 24000 dollars with wells fargo bank. They gave me loan modification for my house, how ever during loan modification they send a letter that my line of credit was cancelled and I dont have to pay back the debt so I reported to IRS And I paid 2000 dollars to them because was considered as income , but afrter 6 month I recieved another letter from wells fargo that I have to paid them back the debt. I called them why all this happened they said because the first letter was send by mistake. So now they want make dell with me to pay them back 7ooo dollars in the lump sump. SO my question to you is this action by the bank legall?

jameshogg · Posted: Tue Apr 19, 2011 10:40 pm Post subject:

Hi rebas,

This is not legal for a bank to do. However, errors can happen and I guess that is something which has happened in your case. If you want to take any legal actions against the lender, then you will have to contact a real estate attorney in this matter.

Thanks

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IS a bank allowed to cancel a home equity line of credit w/o