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Our letter did say we could have an appraisal done and submit it to them, but we have to pay for that. Is it worth it to fight it, I don't know, I just don't have the energy for that.

What is really funny is that we got a credit card offer in the mail from Chase with no interest until Oct. 2009 for balance trqansfers and no transfer fees and we were approved for over $10,000. So we transferred and now they aren't making anything on us! I just don't get it, they are still handing credit cards out left and right, but taking away home equity loans? That makes no sense to me!?

I had my BOA HELOC reduced from $50k to $25k, of course with no notice--I have still not received a letter. What really angers me is their estimate of what the home is worth. It is definitely worth more than their appraisal. I would love some to investigate these 'desktop appraisal' software programs that are being used. Where do they get their information to feed into the programs? How do we know their methodology is correct? If you do in depth research using Cyberhomes or Zillow, I can guarantee you these programs are so far off, it is laughable. I was told by BOA that I could not have an independent appraisal and that they could not refer me to any of theirs. This is absurd. The greedy banks that started this mess, are now ruining lives in order to increase their own profits or get out of the trouble they GOT THEMSELVES INTO.

I just received my letter from Chase yesterday suspending my HELOC. I'm not a happy camper. Luckily I was able to put my floor installation on hold and new kitchen appliances have been canceled.

I'm am completely out of debt except for my mortgage and have $70,000 in equity in the house and the line was only $25,000.

I was going to use this to fix up the house and I am lucky that I do have savings for emergencies but this slap in the face from a lender that made how many billions taking advantage of those less fortunate then I am? Bite me Chase.

This just happened to us this week. We have had the HELOC since last summer, my Dad passed away and we needed money to keep his house from going into foreclosure (he was ill for a long time and couldn't work) and we wanted to do a couple things around our house like pave the driveway. We didn't need all of the money at one time so we went with the HELOC for $49,000. Our home was valued in the upper $400's and our original morgage was about $275,000. We have credit scores of 800 and 790 and only owe another $20,000 in car loans and credit cards, nothing crazy. They cut us off out of the blue, just 'suspended the account' didn't close it they said. Now they value our house at $401,000 which is before the improvements we've made. I never thought it could happen to someone like us, they have always thrown money at us and we have always been responsible comsumers?

Norm, I'm John Ulzheimer and I was quoted here. As VP of Public Affairs for the CDIA is it your position that disputes are never a 'mighty battle?' In this case TU reported the account (Citi) as 'Derog.' I've got the credit report showing as much. And I've got a letter from Citi stating that the account is in good standing was never reported to any CRA as derog. If it weren't for our free help guiding her to the right people she may still be dealing with this. I recognize that the CRAs do a decent job most of the time and that they're buried with junk disputes from credit repair scum but I think you have to be honest here and acknowledge that often legit errors go unfixed and the consumer can't afford an attorney to fight it so they just give up and live with it. Even a 1% error rate of all disputes equals thousands of incidents each day when you combine mail, net and phone disputes x 4 CRAs.

HELOC Freeze Investigation

We are investigating several home equity line of credit (HELOC) lenders for their practice of freezing HELOCs based on claims of reduction in property values without obtaining actual appraisals to substantiate the decline in value. This practice may violate state and Federal law as well as the terms of HELOC policies.

If you would like more information regarding our investigation or have any information that you would like to share please contact Noah Sacks at noah@moginlaw.com or call toll free 888-557-2545.

The Mogin Law Firm, P.C. is a highly experienced Southern California class action firm. This website may be considered legal advertising. No legal advice is offered and no attorney-client relationship or duties are created or intended. Attorneys are licensed in California.

As one who works in the credit reporting industry, I agree that consumers should periodically review their credit reports. However, I disagree that correcting a report 'could be a mighty battle'. In more than 72 percent of the cases, consumer disputes are handled and resolved within 14 days. The rest, generally because it's not clear what is in dispute or a similar issue, are handled within 30 days. The goal of the credit reporting industry is to respond to any consumer inquiry in a timely manner.

Norm Magnuson
Consumer Data Industry Association

Regarding tapping the line in anticipation of the line closing: We have had a couple small/medium institutional clients (larger builders) do just that. The HELOC floats at approx Prime +50bps, so around 5.75% right now. A 5.75% cost becomes a net after tax cost of 3.73% in the 35% bracket. We are purchasing odd lot pre re and escrowed munis at between 2.65 and 3.04% as of last week...anywhere from 2months to 10 months in maturity. Our fee is 50bps max for fixed income accounts...so, 2.75% becomes 2.25% net tax free return. Cost of funds is 3.73%...so, net cost of maintaining liquidity is around 1.50% for these clients. Some choose to access the HELOC to maintain liquidity...others are not being squeezed and don't need to access it...it all depends on the group.

So, it doesn't 'cost them dearly', but it certainly DOES cost them.

Don Cummings
Blue Haven Capital
www.bluehavencapital.com
'Socially Responsible Investment Management'

I don't think tapping the line in anticipation of the line closing is a good idea for 2 reasons:

1. The negative after tax 'carry' (difference between a risk free after tax return on a MM or CD vs. what you'll pay in interest after taxes) will cost you dearly. I think you're better off building a cash cushion.

2. My Heloc says the lender can demand full payment if they close it. Even if they offer you terms, they're likely to be crummy.

3. I also would not count on it's usage not being part of your credit utilization on all three bureaus. I believe it could lower your credit score, despite what the article says.

It woud seem to me that this person has grounds for a law suit here. Wasn't she charged a fee for this home equity line of credit? And then denied same?

I can say from personal experience, HELOC's are much tougher to open nowadays. Even with a decent credit score (above 800), I had a tough time this past month. These banks are definitely cracking down... a lot more rules and phone calls this time around. I felt like a ex-con trying to get a job. I hope they loosen up soon. And yes I have an emergency fund. Doesn't everyone on the planet?

Why did Teri not have an emergency fund?