Home Equity Line of Credit Reductions and Cancellations

BANKS WILL REDUCE OR CANCEL HOME EQUITY LINES OF CREDIT WITHOUT A VALID BASIS

Banks often will reduce or cancel a borrower’s home equity line of credit and give the excuse that the borrower’s home significantly declined in value. Many banks do not want to spend the time or resources to go through the process of actually determining a borrower’s home value. Instead banks will rely on questionable instruments that only evaluate general home values in a large geographical area, and then will reduce or cancel a large number of home equity lines of credit in a particular area or zip code. But an overall decline in home values in a particular area, doesn’t mean a particular borrower’s home had declined in value. This banks practice of reducing and canceling home equity lines of credit without assessing whether each borrower’s home had significantly declined in value is unlawful.

SEEK CONSULTATION

If a bank reduced or canceled your home equity line of credit, you should seek consultation to make sure the bank’s actions were lawful. You should not blindly accept a bank’s representation that your home had declined in value or that your home’s value had been appraised.