Have your HELOC hacked?

[GelStra]

Got a letter from the giga-bank (who's in serious financial doo-doo) that holds my home equity line saying that, due to falling property values in my area (So. Cal) they were reducing my line by $80,000!! Hmm, didn't know they could/would do that. Ah, people living on their HELOC's are in deep yogurt!

 

Anyone else?

[Dave McReynolds]

I wonder if they can call in loans they have already made, or just reduce the available credit for future loans? I suppose it would depend on the individual agreement you signed, but I imagine it would mainly be applicable to limiting your undrawn credit.

[dewtwo]

Many parts of the US are experiencing declining markets, and yours is certainly one of them. Yes, your bank can reduce your line if you have the room available. We have our HELOC with a credit union, and I have heard they are starting to reduce lines. If you don't have room to reduce the line of credit, they are converting your loan to a fully amortizing loan. YIKES! Just use common sense when dealing with your home, and you should be fine!

 

Good Luck

[Les is more]

We got the same letter. They didn't reduce ours, just said we couldn't takes anymore out. Dang! We still had 5 bucks left to take out of there!

[Paul_Burkett]

Mine said that the line wasn't moving...but they do want the free pens back.

[DavidEBSmith]

Now, will your property taxes go down if the value of your house drops?

 

In Illinois we have re-valuation every three years but the state House just passed a bill to make it every year in Cook County (where Chicago is). The theory is that we can get the benefit of the drop in property values as property tax relief in the short term.

 

Of course, when property values start rising again, this would also have the benefit of spreading out the massive tax increases that we've been getting hit with with inflated property values going up 100% in 3 years. Now we'll only have a 33% increase every year instead of a 100% increase every three years. Much easier for the politicians to hide.

[Dave McReynolds]

In California, properties can be reassessed downward, but upward reassessment can't go higher than the cost of the house. We almost never saw a downward reassessment in the past, as properties were generally worth more than cost. Now, I'm sure that will be more common.

[GelStra]

We got the same letter. They didn't reduce ours, just said we couldn't takes anymore out. Dang! We still had 5 bucks left to take out of there!

Sheesh! With as hard as San Diego county's property values have been hit lately(the fire sale you had sure didn't help!) I'm surprised they didn't ask you to sell the old guy to pay some of the balance down! Well, upon rethinking that, doubt it would've helped! No antique value yet....just old!