Saturday, February 23, 2008

Homeowners Losing Equity Lines reported In one brief phone call, Nancy Corazzi's lender yanked away what was left of the $95,000 home equity line of credit that she and her husband took out five months ago. The lender informed her that her Howard County home had plummeted in value and the company did not want the risk that she would owe more than the house was worth.
That is very smart ofon the part of the lender, and the Corazzis should be happy they saved them from potentially losing their house because they owed more than it was worth.
"I got off the phone and I was shaking," said Corazzi, who was using the money to pay preschool tuition for her twins ."I was near tears. We needed this credit line to get us through some tough times."
You borrowed money on your house to pay for preschool tuition??? And you call that tough times??? Lady, you don't know what tough times are. You have a nice home to live in, and food to feed your twins. Maybe they can't go to a ritzy preschool, but so what.
Several of the nation's largest lenders, along with smaller ones, are shutting off access to home equity lines in areas where home values are declining. It's an unusually aggressive move as the industry grapples with fallout from the mortgage crisis that began unfolding last year. Now that home prices have dropped in many parts of the country, lenders are nervous that they may never collect the money that they extended to borrowers. They are responding by freezing or lowering the credit limits on home equity lines,
Which is good business sense.
leaving thousands of borrowers like Corazzi in the lurch.

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