CASH STRAPPED: Banks tighten, close equity lines of credit
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, equity lines, heloc March 3rd, 2008BAY AREA RESIDENTS accustomed to treating their homes like piggy banks could be in for unpleasant surprises as home prices decline in many areas. Not only are banks less willing to issue popular home- equity lines of credit, but some of the nation’s biggest lenders are freezing existing loans.
Countrywide Home Loans, for example, has sent letters to at least 122,000 homeowners nationwide informing them they can no longer draw on their home-equity lines of credit. Many homeowners rely on these pay-as-you-use-them loans to finance things such as remodeling, college tuition and emergency expenses.
Morgan Hill homeowner Kelly Urbina received a letter from Countrywide two weeks ago telling her she can no longer access the credit line that she says the lender encouraged her to get when she bought her three-bedroom home in 2006.
“I still have a substantial amount of equity in my property, so I was surprised to get a…
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