That was the question that came from a very good client of mine who received a nastygram from Countrywide stating that she could no longer access funds from her equity line with Countrywide. ”Can they do that?”, she asked me. With a mild pause I replied with a reluctant, “Yes, unfortunately they can.”
I then went on to explain that suspending access on a home equity line is not exclusive to Countrywide. In fact, every home equity line provider that I know has a provision in the credit line agreement that allows the provider to suspend access to available credit if the property is deemed to be in an area that has a declining market.
As I’m talking with my client, I typed in a quick inquiry with the LA Times website, and discovered the following article: http://www.latimes.com/classified/realestate/buying/financing/la-fi-loans1feb01,0,6594136.story
So what can one do if such a nastygram appears and one needs to access funds from their equity line? One suggestion is to simply apply for a refinance of the existing equity line with your favorite lending professional, presuming that your favorite lending professional is not with Countrywide nor intends to broker such a request to Countrywide.
Another suggestion may be to wait until the conforming loan limit for select regions of California is increased, which may allow current homeowners to refinance two mortgages into one. For more on the current stimulus package, check out: http://www.nytimes.com/2008/02/08/washington/08fiscal.html?pagewanted=1&WT.mc_id=PO-S-E-YH-NA-NA-stimulus_package_economic&WT.mc_ev=click&ei=5087&en=45b9baed4b5f89b7&ex=1218085200&WT.srch=1&excamp=OVPOstimuluspackageeconomic
The latest word on when applications may be received for loan requests at the higher conforming limits will be July 1, 2008
Conbtibuted by:
Eric Trailer
Absolute Mortgage Banking
T: (650) 543-8001
Email: etrailer@absolutemortgage.com
