Quote:
Originally Posted by Surfah
My parents had a home equity line of credit through Wachovia that was frozen last week.
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Very common practice right now to combat mounting losses. Under TILA (Truth in Lending Act) a bank is legally able to take such actions if the equity pad on the loan has been reduced by a substantial margin - unfortunately that is regardless of the credit worthiness of the customer and I too have been a victim recently despite a credit score>800. Resticting or reducing Home Equity LOC's is a much trickier ordeal (from a legal standpoint) than taking adverse action on another lending product such as credit card, personal loan, etc. Home Equity LOC's have virtually become an "unsecured" lending product in the last year or so with declining home values and banks are doing as much as they can to hedge losses.