Countrywide, JPMorgan, WU, Wells Fargo freeze equity lines

[flashl]

Lenders freeze equity lines in response to tumbling property values

Countrywide Financial announced this week that it cut off borrowers

Several banks issued statements this week saying they were temporarily suspending withdrawals from open home equity lines out of concern that borrowers could owe more than the house is worth.

Historic declines in property values have stripped many local homeowners of their safety nets as lenders freeze lines of credit ---- even on people who are current on their mortgage payments.

"It's an emotional hardship," said Patti Lien of Menifee. "We kept our credit good. We've done everything right, and this is what we get because Countrywide made all these crappy loans."

Home equity lines of credit are loans that use a home as collateral and allow the borrower to withdraw money up to a maximum credit limit.

Those lines are drying up as Countrywide Financial announced Thursday that it has cut off 122,000 borrowers from pulling any more equity out of their homes. Wells Fargo, Washington Mutual and JPMorgan Chase released statements Friday saying they have also started halting equity lines because of tumbling home values but declined to provide numbers of suspended equity lines.

North County Times

Amazing ... Countrywide borrowed over $51B on same assets.

[fasttense]

1. I had an open home equity line of credit.

But thank God I never had to use it. Even if my home goes down in value, I still owe less than the value.

[Raven]

2. Wow! This is going to be a very serious problem. I know many

people who rely on those lines for emergency funds.

[fasttense]

8. Exactly.

I kept the line of credit in case of emergency. I never had that emergency but I know many who did. I wonder what folks will do now if they get an unexpected job loss or medical bill?

[patrioticintellect]

3. JP Morgan Chase

Is financing change...

http://www.whitehouseforsale.org/bundler.cfm?Bundler=11465">Hillary's Funding

http://www.opensecrets.org/pres08/search.asp?txtCID=N00000019&name=&employ=jp+morgan+&state=%28all%29&zip=%28any+zip%29&submit=OK&amt=a&sort=A">Hillary's Funding Part 2

http://www.opensecrets.org/pres08/search.asp?txtCID=N00009638&name=&employ=jp+morgan+&state=%28all%29&zip=%28any+zip%29&submit=OK&amt=a&sort=A">Barack's Funding

[Arger68]

4. Could they be doing this because people are simply

maxing out their HELOC and walking away from their home (and attached mortgages)?

[ursi]

5. the era of the house being an ATM is over ....

[Warpy]

6. So much for using the McMansion's paper profits

to pay off that credit card. Also, so much for using the paper profits to do silly things like cover the bathroom walls and floor with marble (it turns pee yellow when exposed to steam) and the kitchen swathed in granite.

People who were counting on lines of equity credit to pay of high interest loans are going to be sunk. Those cruises and flat screen TV sets are going to cost them a lot more than they anticipated.

[Adsos Letter]

7. As usual you make excellent points....

but that marble should not be yellowing if sealed properly...with an acrylic sealer...often it is the oil sealers which actually do the ambering...

[stevebreeze]

9. marble and granite are not even close to the worst I have seen

I have seen fiber optic star scapes embedded into to a domed foyer ceiling. I have seen; swimming pools with crossing fountains spewing for the head of lions on both sides of the pool, indoor waterfalls, wine cellars for thousands of bottles of wine with a computer driven retrieval system, an indoor basketball court that is entirely underground (about 300k if I remember), indoor rock climbing walls.
The excess is are beyond imagination.

[Warpy]

10. Fortunately for me, I've managed to shed all my old money acquaintances

and I certainly don't hang around with brokers and investment bankers in this financial backwater in the desert southwest.

However, I do know the level of excess being achieved in some of the pleasure palaces across the country, the ones we commoners never see because they are so well hidden behind winding roads and vegetation that they rarely need walls and armed guards.

You can find them located near the network of private jet airports across the country.

It's only the upper echelon of proles who would have done the marble and granite, people whose net worth is already in negative numbers but who still have head room on a couple of credit cards and haven't quite realized they're destitute yet.

[Xenotime]

12. That's what we used ours for.

We did two weeks in Italy. Put in a sprinkler system and theater.

[DemReadingDU]

11. We used the HELOC to buy a car

It's paid for now and the balance is zero.

The HELOC is an easy way to get a sum of money quickly. But we have always been responsible and paid our debts quickly. Everything is paid for now, even our house. I would hate to think that my bank would freeze our HELOC.