Author |
Freezing HELOCs |
cstoney04
29 Posts
Member Since: 03/15/2005
Stamford, CT
 Join cstoney04's Network
What's My Favorites Network? |
Posted: 22:26 on 01-25-2008
Has anyone had any issues with this or heard of this happening? This is extremely scary for me as I have much of my reserves parked in HELOC's. I'm now having to contemplate putting my money in something else for the short term and taking a loss on the interest I'll have to pay on the Line of Credit.
Profile of cstoney04
 Edit/Delete Post
 Quote this Post
 Report this post
|
dirtman89
224 Posts
Member Since: 08/04/2003
Derry, NH
Join dirtman89's Network
What's My Favorites Network? |
Posted: 00:31 on 01-26-2008
I have been worried about the same thing and have drawn my helocs out this last week to protect from that possibility. If I lost access to that $$ I would be screwed. For sure I am wasting some on the interest since I don't need all the $$ right now, but I think of it as insurance to stay in biz. I probably should read the note to see if they can, but I have heard of someone paying a different payment late and they froze his heloc.
Profile of dirtman89
Edit/Delete Post
Quote this Post
Report this post
|
cstoney04
29 Posts
Member Since: 03/15/2005
Stamford, CT
Join cstoney04's Network
What's My Favorites Network? |
Posted: 07:57 on 01-26-2008
What means are you using? I was thinking of a mixture between my 401K, stocks and an online savings account. They can definitely freeze the line at any time. It's just like a credit card.
Profile of cstoney04
Edit/Delete Post
Quote this Post
Report this post
|
ypochris
2200 Posts
Member Since: 03/22/2006
Lansing, MI
Join ypochris's Network
What's My Favorites Network? |
Posted: 09:02 on 01-26-2008
I am dependant on HELOCs for expansion and so am interested in any information on what would cause a lender to freeze your line of credit. I recently drew mine almost all the way down to complete another deal, but if there is a possibility of a freeze I would prefer to pay for a rate lock on the current 7.5% and use the refi I would normally use to pay off the HELOC for the next purchase.
Normally I park the money in the HELOC and draw on it as needed to save on interest, but without the HELOC money I would have to sell a property to continue my business, and I prefer to hold- especially in this market!
Chris
Profile of ypochris
Edit/Delete Post
Quote this Post
Report this post
|
ceinvests
686 Posts
Member Since: 11/13/2003
Locust Grove, VA
Join ceinvests's Network
What's My Favorites Network? |
Posted: 19:19 on 02-03-2008
Yes, please share any info. per any freezing going on with helocs, everybody.
I personally had this happen last summer/fall when Wells Fargo was changing websites. The change caused the autopay not to work and by the time I caught it and got to a person to notify and correct, they had frozen account. They unfroze as soon as payment made. Additionally, in the fall, I had 2 helocs increase limits. One was a different WF heloc, other was CW and both were on investment props.
Profile of ceinvests
Edit/Delete Post
Quote this Post
 ceinvests's Group
Report this post
|
jerlaff6
10 Posts
Member Since: 02/03/2008
Arcadia, CA
Join jerlaff6's Network
What's My Favorites Network? |
Posted: 23:54 on 02-08-2008
I was also contemplating whether Countrywide would freeze my HELOC - and when I called in last week they did!
They stated that they are freezing HELOCS in softer markets until things pick up - that could be a long time...
I was going to pull out my 60K and use it to buy 5 more rentals, but now I'm screwed! I had it paid down to avoid the interest and planned to only use in on occasion to purchase new properties.
Oh well, what can I do. This will only make the economy suffer more IMO if these banks (Countrywide/BofA, Wells, etc.) keep funds like this frozen from the standard consumer who is trying to weather out this recession.
Jer
Profile of jerlaff6
Edit/Delete Post
Quote this Post
Report this post
|
ceinvests
686 Posts
Member Since: 11/13/2003
Locust Grove, VA
Join ceinvests's Network
What's My Favorites Network? |
Posted: 09:23 on 02-09-2008
Well, guess what!
I went to CW site last week to get tax numbers. There was an offer for a heloc, so I called to see what they had in mind. The guy was evasive at best and stated that my primary was in an 'Orange' area (most of Va. is Orange now). Oh, NO!
= Soon I Got a letter in the mail. They froze my heloc on my primary that I had just paid down by 10K! Do I feel like a fool, since I have other loans w/higher rates that I should/could have put that 10K on!
I do get that the area is suffering from foreclosures due to high ltv loans they did, but there is still equity in my house where I have lived for 3 yrs. w/perfect payment history AND they service 1st loans on 3 investment properties w/ 50% ltv and 5+yrs perfect payment history.
Geez.
Meanwhile, WAMU just offered me another loan mod. to take my 6.5% down to 5.5% for 5yr. arm int. only.
Profile of ceinvests
Edit/Delete Post
Quote this Post
ceinvests's Group
Report this post
|
ypochris
2200 Posts
Member Since: 03/22/2006
Lansing, MI
Join ypochris's Network
What's My Favorites Network? |
Posted: 09:44 on 02-09-2008
Here in Michigan "redlining" (restricting loans in certain areas) is illegal. It sounds like this has happened to you ("orange area"). Many states have laws against redlining because it is considered discrimination (orange areas = non-white areas). I would consider inquiring with the Attorney General's office on this.
Chris
Profile of ypochris
Edit/Delete Post
Quote this Post
Report this post
|
cjmazur
4284 Posts
Member Since: 07/23/2003
Cupertino, CA
Join cjmazur's Network
What's My Favorites Network? |
Posted: 02:20 on 02-10-2008
pull out the heloc agreement. If the said it's a 15 year line, drawable for 10 yrs how can they freeze it? I have never seen a clause where they can re-evaluate the collateral and modify the agreement.
Profile of cjmazur
Edit/Delete Post
Quote this Post
Report this post
|
povrtsux
100 Posts
Member Since: 11/14/2004
Arlanza Village, CA
Join povrtsux's Network
What's My Favorites Network? |
Posted: 14:48 on 02-10-2008
Hi Guys,
My investor friends have heard the same about this freezes.
The obvious reason to freeze a HELOC would be any changes in the owners credit, missed or delayed payments.
In this case that would be understandable.
Other than that, then the situation would be scary and we need to find out.
Chris, you should post the question and do some kind of survey to find out if this is happening all across. Or just to few and why.
Profile of povrtsux
Edit/Delete Post
Quote this Post
Report this post
|
rmdane2000
560 Posts
Member Since: 05/12/2004
West Des Moines, IA
Join rmdane2000's Network
What's My Favorites Network? |
Posted: 20:54 on 02-10-2008
On my most recent statement they offered me a discounted rate if i drew my HELOC down...My HELOC is with Fifth Third Bank.
Profile of rmdane2000
Edit/Delete Post
Quote this Post
Report this post
|
dirtman89
224 Posts
Member Since: 08/04/2003
Derry, NH
Join dirtman89's Network
What's My Favorites Network? |
Posted: 23:19 on 02-10-2008
I read my heloc documents and they can freeze it at anytime like a credit card. Mine is with Bank of America. I know it is tough for penny-pinching investors to draw out heloc and have the money sit in a lesser interest account, but consider where you would be if you lost access to that $$$. If you can handle being without the $$$ then you have nothing to worry about. I can buy several props with $60k and must not lose access to that cash. The heloc interest is deductable anyway so I get some of it back.
Profile of dirtman89
Edit/Delete Post
Quote this Post
Report this post
|
povrtsux
100 Posts
Member Since: 11/14/2004
Arlanza Village, CA
Join povrtsux's Network
What's My Favorites Network? |
Posted: 21:48 on 02-14-2008
Hi Guys,
IndyMac just froze mine due to declining values.
If you need yours, you better get them before it's too late.
Good Luck!
Profile of povrtsux
Edit/Delete Post
Quote this Post
Report this post
|
cstoney04
29 Posts
Member Since: 03/15/2005
Stamford, CT
Join cstoney04's Network
What's My Favorites Network? |
Posted: 08:41 on 02-15-2008
Where was this property located? What type was it house/condo?
Quote:
|
On 2008-02-14 21:48, povrtsux wrote:
Hi Guys,
IndyMac just froze mine due to declining values.
If you need yours, you better get them before it's too late.
Good Luck!
|
|
Profile of cstoney04
Edit/Delete Post
Quote this Post
Report this post
|
povrtsux
100 Posts
Member Since: 11/14/2004
Arlanza Village, CA
Join povrtsux's Network
What's My Favorites Network? |
Posted: 10:05 on 02-15-2008
SFH in Riverside, CA. I had a feeling they would do it. They stated that they will unfreeze it once conditions get better. Like the previous post said, that would be a while. And now I just can imagine what would happen to those people that depend on this HELOC to pay their monthly housing and CC bills. This can really trigger another wave of delinquencies and foreclosures.
Does anyone know how to get the Zip Code list that banks are redlining as declining areas?
Profile of povrtsux
Edit/Delete Post
Quote this Post
Report this post
|
