As some of you know my Dad passed away last year in July. My husband and I took out a home equity loan to bail his house out of foreclosure and to pay his monthy bills so we didn't lose the house since there is some equity in it. Plus the $10000 we had to use to do repairs after the inspection found major problems

I wrote a check today from our home equity account to the estate account for $1000 (the monthly bills) and THEN I get a letter in the mail that Chase has reevaluated our house and we don't have enough equity and therefore they are denying us access to the remainder of the money. (we have abour $25000 left available and have used about $25000) SO they were going to bounce the check I wrote today and pretty much said too bad, now we were going to have a bounced check fee, late fees, etc. I called the bank where the estate account is and they pulled the check for me, so I stopped it in time luckily.

What about people who paid bills with their HELOC's? All of those checks are going to bounce and put them in deaper than they already are.


Thanks for letting me vent and if you have a HELOC watch out!!

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"A true friend is someone who thinks that you are a good egg even though he knows that you are slightly cracked." ~ Bernard Meltzer

I don't understand why you are putting your money in an estate account? The estate account deposits are for funds due the deceased. The estate payments are for obligations the deceased is responsible for. If anything from what you said, the estate should be reimbursing you. Children do not fund an estate account.

There are no funds due, he died owing thousands and with a house under foreclosure. If we don't pay the bills we'll loose the house and the equity that's still left.

I deposited what I needed into the estate account to keep an accurate record of what we've used for what, I didn't want to pay things right out of my accounts, it's too confusing that way.

I just can't believe they have the right to take away the line of credit, it's not like we are ever late or have poor credit (I"m over 800 and DH is pretty close behind). We aren't the ones who can't pay our bills or who are not responsible, we're using it to BE responsible!

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"A true friend is someone who thinks that you are a good egg even though he knows that you are slightly cracked." ~ Bernard Meltzer

Well, sorry your good deed and responsibility is coming back to bite you in the @$$. But, since they are now telling you that you have no equity in the house, maybe it is time to stop throwing any of your own money into it, especially in this declining housing market. I applaud you for trying to be responsible, but don't let it drag your family down.

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"Well-Behaved Women SELDOM make history."Laurel Thatcher Ulrich


"Yesterday is but a vision, and tomorrow is only a dream. But today well lived makes every yesterday a dream of happiness, and every tomorrow a dream of hope." Anonymous

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Have the courage to be yourself.

That really sucks. Flipper, I am so sorry!

Sorry OP I hope you are able to work things out. Did the value of the house decrease & it's no longer worth as much so you no longer have equity..is that what happened? Something similar happened to a neighbor, their HELOC was 'pulled' and it sounds similar to what you describe..I might not be understanding it but am sorry to hear the bad news.

That stinks!! However, with the way the housing market is right now I am not surprised to hear companies are doing this. I think it is really crappy of them.

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I thought once you had a line of credit you are already approved for it, now if you would of used the entire thing up right away and didnt save the other 25,000 there would be nothing they could do about it. It dosent seem right to me at all, Do you speak to a hire up person and not the first person who answered the phone when you called?

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Proud mom to 4 great boys Anthony20,Nicholas16,Michael4,Sean2

I asked to talk to a supervisor and was told it wouldn't do any good, this is an across the board thing because of the drop in housing values in the area. I still have almost $100000 equity in the house even using their number and we have actually paid off a TON of stuff this year including 2 credit cards and all but $1000 on the one and only car loan we have.

This is all what worries me the most, we aren't high risk borrowers. Unless they count all of our open, but unused credit? We have credit cards all with no balances that we don't even use, but we've always had that.

If we had a home equity LOAN they couldn't take it back, but this was just a line of credit because we didn't know how much we would need for my Dad's house or how long that would go on. I didn't want to pay interest on the whole thing if we were only going to use $10,000, so we only use what we needed slowly over the last year.

I do have the right to appeal, but I have to pay for an appraisal and actually fight the bank for it, not really worth my trouble I don't think.

I am still happy with what they say the house is worth in this market, we only bought it 2 years ago and to be up that much is just fine with me for 2 years, not including the improvements we've made since their appraisal was even done so that isn't even entiraly accurate either. Oh well what are you gonna do?

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"A true friend is someone who thinks that you are a good egg even though he knows that you are slightly cracked." ~ Bernard Meltzer

I don't think it has anything to do with the amount of credit cards you have opened..Drop in home values in your area is what caused this.. I would check to see if you can qualify for a lower amount so you can finish the repairs.. Good Luck!
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April 21, 2008, 2:27 pm
What if the Bank Freezes Your Home Equity Line of Credit?

Lenders are freezing existing home-equity lines of credit (HELOCs) to protect themselves from losses from subprime mortgages and other high-risk loans, writes Carolyn Bigda in an article for Money Magazine. Real-estate blog, Behind the Mortgage, takes a tongue-in-cheek look at the trend in a fictitious Dear-John-style letter (from a lender to a borrower) that it has created.

Homeowners most at risk for having their lines of credit frozen include those residing in areas where home prices have fallen 10% or more, those who’ve purchased their homes within the past few years with little or no money down, people who’ve missed a payment or have had a change in their credit score, or those whose house debt is larger than their bank’s loan-to-value cap. (Loan-to-value represents a home’s appraised value versus the loan amount.)

In 2007, delinquencies on HELOCs were up 47% year-over-year and are expected to rise even more in 2008, according to Economy.com data cited in the article. (See data on HELOC delinquencies going back to 2005.) Among lenders who’ve frozen or are considering suspending HELOCs are Countrywide, Bank of America and Citibank, Ms. Bigda says.

If you’re worried that your bank may freeze your HELOC and you need the cash, Ms. Bigda suggests taking the money out now, but not borrowing more than you need — you’ll owe interest and the loan amount could surpass your home’s value if prices keep falling. Put the cash in a high-yielding savings account or CD until you need it, she says.

For those whose home-equity lines of credit have already been frozen, try appealing to your bank, she says. Find out the reason for the freeze – if it was because of local home-price declines, have a real-estate agent research local selling prices for you, or have your home reappraised. Also try checking your credit reports to see if they could be the reason your account was frozen. If your appeal falls through, try asking for a lower line of credit instead, she says. — Lauren Baier Kim

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