CONSUMER NEWS    RECALLS    COMPLAINT FORM    SCAM ALERTS  


Complain about a product or service

Small Claims Guide | Class Actions | Lemon Law | FAQ | Resources | Newsletters | Spanish
Automotive    Education    Electronics    Family    Finance    Health    Homeowners    Shopping    Travel   
NEWS   Latest |  Archives |  Auto |  Cells, etc. |  Computers |  Financial |  Health |  Homeowners |  Parents |  Privacy |  Scams |  Seniors |  Travel

Banks Pulling Back on Home Equity Loans

Don't be too quick to start that kitchen renovation



By Truman Lewis
ConsumerAffairs.com

February 23, 2008

Living in a Bubble?
Mortgage Crisis? Act Now to Avoid Foreclosure
Avoiding Foreclosure Takes More Than Hope
---
California Legislature Passes Mortgage Reform Bill
117 Banks On FDIC's "Problem List"
Home Reports Offer Signs Of Hopeful Trend
Housing Market Still Favors Buyers Over Sellers
Indiana Sues Countrywide Financial
Inflation Rising, Home Construction Falling
Rise in Mortgage Rates Linked to Falling House Prices
Has the Bear Market Hit Bottom Yet?
Inflation Surges in July
Sales of Existing Homes Hit 10-Year-Low
Foreclosure Activity Up 55 Percent In July
West Virginia Sues Countrywide Financial
Pending Home Sales Rise In June
---
More ...

Homeowners are learning the hard way that home equity credit lines may not be there when they're needed.

Lenders are freezing or reducing credit lines in parts of the country where the decline in real estate values has been the steepest, the Washington Post reports.

Countrywide Financial, the nation's biggest mortgage lender, suspended the home equity lines of 122,000 customers last month after reviewing property values and outstanding loans, the Post said.

USAA, Bank of America and other lenders either have done the same or are planning to do so, according to the report.

This latest development in the collapsing real estate market is likely to come as a shock to homeowners counting on their home equity lines for home improvement projects, college tuition and other major expenses.

Last year, according to a survey of lenders by BenchMark Consulting International, 29 percent of homeowners used their equity lines for home renovation. But while home equity lines are popular with homeowners, BenchMark found lending executives becoming queasy about their exposure in a declining real estate market.

In its survey of 29 North American financial services executives, BenchMark found that more than 95% felt that the current environment will continue to get worse in 2008.

The Federal Reserve currently places the charge-off rate for residential real estate loans and lines up 150% from the third quarter of 2006 to the third quarter of 2007. But most of the executives surveyed said their charge-off rate was not that high. Most said it had increased less than 50% since last year.

And despite the increased fretting, actual default rates on home equity loans remain low. Nearly 80% of those surveyed had foreclosure rates of less than one percent. Most said they are preparing for the difficult times ahead by tightening their home equity lending and collection policies.



Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.


Consumer News

August 29 2008

Recent Recalls & Safety Alerts



FREE CONSUMER NEWSLETTERS

The Daily Consumer
Afternoons M-F

Sign up now!


Consumer News & Alerts
Every Sunday

Sign up now!


Knowledge is free.
Knowledge is power.



Back to the top |

Advertisement


Home | Complaint Form | News | Recalls | FAQ |
Consumer Resources | Small Claims Guide | Lemon Law | Newsletter | Contact Us
Advertise With Us | Testimonials | Newsroom | RSS Feeds |


Terms of Use Your use of this site constitutes acceptance of the Terms of Use

Advertisements on this site are placed and controlled by outside advertising networks. ConsumerAffairs.com does not evaluate or endorse the products and services advertised. See the FAQ for more information.

Company Response Welcome If complaints about your company appear on our site, we welcome your response. Please see the Response Form for more information.

For more information, see the FAQ and privacy policy. The information on this Web site is general in nature and is not intended as a substitute for competent legal advice.  ConsumerAffairs.com Inc. makes no representation as to the accuracy of the information herein provided and assumes no liability for any damages or loss arising from the use thereof. 

Copyright © 2003-2008 ConsumerAffairs.com Inc.  All Rights Reserved.    The contents of this site may not be republished, reprinted, rewritten or recirculated without written permission.