Lenders slam the door on home-equity lines of credit

How Ironic.....The same people who sold Sub-Prime, Fiscal "Hocus Pocus" New Home loans to unknowing, or ignorant Home-Buyers, is now telling innocent Homeowners who have built up their Equity over time, that they have little or No value anymore. They are making innocent and Frugal Homeowners new Pawns in a fiscal Mess of their own creation.

Another blatant case of the blind leading the blind.... It's sort of like 'Ready, Fire, Aim'..... These idiots did no case by case review before pulling the plug. Bank of America did it to me. My line of credit was approved(at their suggestion several years ago) at about 50% of today's market value. I was only using about 15% of today's market value, have never had a problem with payment and have excellent credit and net worth. After a complaint and sending in a request form, they re-instated it. Wouldn't it have been nice for them to have looked at it before causing me so much grief.

Well guess what? I'm pulling the plug on them!!!!

WOW, this means I can not live in a 400K home when I only make 35 K a year. .

Well, first nobody is "innocent".

Second,'value' isn't a law of nature. It is a subjective judgment on the utility of a good or service made by humans.

After 3000 years Solomon is still right..."the borrower is the servant of the lender".

Sounds like the banks are "overdrawn" due to their own negligence and now they are punishing the good customers....Glad I don't have or need a home equity line........

The important thing is that the City/County can still borrow 2 billion for the venues, Nothing else matters to our fine Mayors.

"Banks are looking at home values closely," said Fritz Elmendorf

Really? So banks are going to closely revue your credit, income, job history, the homes actual value, ect... before loaning out hundreds of thousands of dollars?

I don't really think this is a new concept. I think people just forgot that 10 years ago home loans were difficult to obtain and a second mortgage was not something you bragged about, it was a last resort to tap your home equity.

A loan offer of any kind against collateral or equity should depend on the value of the collateral or equity. So when that drops, why shouldn't the banks refuse to lend more money on it?

I'm sick of people, whose home values went way up early in the decade, crying because prices are going back down. Very few people who bought houses before 2000, and still have them, have actually lost money. As for the more recent purchasers... buying a house is buying a speculative investment on margin, isn't it?(That's why people got wiped out, instead of just hurt, during the Great Depression.) Live by the sword, die by the sword... and let's all take responsibility for the risks we choose.

Am I the only one who thinks home equity loans are a bad idea? A home owner's goal should be to pay-off the house as soon a possible. Fiscal discipline means having an emergency fund for those unexpected expenses and not going into debt for junk we can't afford.

This could be the best thing to happen to those addicted to credit.

"I don't really think this is a new concept. I think people just forgot that 10 years ago home loans were difficult to obtain and a second mortgage was not something you bragged about, it was a last resort to tap your home equity."

Yes, back before all of this greed, stupidity and fraud were unleashed. A house was a depreciating asset where you raised your family, not some 'super investment' that people with no money or common sense traded back and forth like beanie-babies. We are on our way back to that, but it will be very painful for some.

Maybe people should not take loans against their houses to buy things they cannot afford. The people in this story are old enough that they should live within their means. If you do not have money to put granit counter tops and plasma TVs you should not borrow against your house for it. You save tons of money to stop borrowing on credit cards, home equity and the like. Actually try to pay off a home loan and you will discover that you can actually have money in the bank and investments.

I am laughing while reading this article, because just yesterday I received a letter from my bank saying that I have been preapproved at 4.25% for a home equity line of credit. I keep getting other offers from credit card company where it is zero % for the next 12 months with no balance transfer fees and after that my rate will never go over 12%.

I wonder what some of these peoples true credit rating is, but than I did not rush out to buy a new home or car.

You will not see this going on in any other state. just sunny Floriduh. get it DUH....

Good for the lending institutions. It is high time the lending market, took some control over those that live above their means and will spend every penny they can get their hands on to include all they have and can borrow. It is just too bad this wasn't done before everything went down hill. If there had been some responsible lending coupled with some responsible borrowing, we wouldn't be in this predicament. It is not wise to live the American dream on someone else's dime, because sooner or later, they are going to want their dime back.

My mortgage is $ 1,200. I didn't want to over extend myself with a
$ 85,000 salary.

Panem et Circanses wrote:

A loan offer of any kind against collateral or equity should depend on the value of the collateral or equity. So when that drops, why shouldn't the banks refuse to lend more money on it?
I'm sick of people, whose home values went way up early in the decade, crying because prices are going back down. Very few people who bought houses before 2000, and still have them, have actually lost money. As for the more recent purchasers... buying a house is buying a speculative investment on margin, isn't it?(That's why people got wiped out, instead of just hurt, during the Great Depression.) Live by the sword, die by the sword... and let's all take responsibility for the risks we choose.

The value of the dollar has fallen through the basement and it still has not hit rock bottom. There is not a single person that lives by, saves, earns or deals in dollars that has not lost and will continue too. To bad there is not another Bush to elect so we could have another spend what we do not have, war. Example as well as money do not trickle up they trickle down. All the tax cuts trickled to China and all the borrowing example trickled right down to the house next door.
"responsibility for the risks we choose" I did not vote for Bush. Did you? Where did Dick go now that the s hit the fan, Due Bye. Halliburtan earning are coming out soon, wonder how they did, up up and away, I bet.

chuck P wrote:

Am I the only one who thinks home equity loans are a bad idea? A home owner's goal should be to pay-off the house as soon a possible. Fiscal discipline means having an emergency fund for those unexpected expenses and not going into debt for junk we can't afford.
This could be the best thing to happen to those addicted to credit.

A home equity loan should be the loan of last resort for something you absolutely have to have.

Maybe people should not take loans against their houses to buy things they cannot afford.

You said it garym1a2.

These loans are for idiots... parlaying your home against another loan makes complete sense... derrrrrr.

Edward wrote:

I am laughing while reading this article, because just yesterday I received a letter from my bank saying that I have been preapproved at 4.25% for a home equity line of credit. I keep getting other offers from credit card company where it is zero % for the next 12 months with no balance transfer fees and after that my rate will never go over 12%.
I wonder what some of these peoples true credit rating is, but than I did not rush out to buy a new home or car.

Edward, you are so smart! I would love to slap you on the back. Your just smart. Unbelievable, gold star for you.

Your talking about the Federal Government right?

Free white and 21 wrote:

Good for the lending institutions. It is high time the lending market, took some control over those that live above their means and will spend every penny they can get their hands on to include all they have and can borrow. It is just too bad this wasn't done before everything went down hill. If there had been some responsible lending coupled with some responsible borrowing, we wouldn't be in this predicament. It is not wise to live the American dream on someone else's dime, because sooner or later, they are going to want their dime back.