Comments on: Citibank Freezes Home Equity Lines of Credit

By: Queercents » Blog Archive » Equity Lines of Credit: Seek Other Financial Shelter

Wed, 03 Dec 2008 15:35:40 +0000

[...] this year, the HELOC on our Newport Beach home was reduced to practically nothing and the line on one of my rental properties was suspended completely. Both notices came as a result [...]

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By: Your HELOC is NOT Your Emergency Fund

Your HELOC is NOT Your Emergency Fund — Mon, 29 Sep 2008 14:54:59 +0000

[...] area where prices aren’t going down, you’ve got great credit, etc, your bank may still freeze your HELOC (fortunately, Nina’s wasn’t her emergency fund). That’s in the best of [...]

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By: Queercents » Blog Archive » What Happens to Credit Card Debt if Bank Fails?

Fri, 19 Sep 2008 13:11:31 +0000

[...] of credit. Home equity lines of credit (HELOC) follow a different set of rules as Nina learned when Citibank froze their HELOC and reduced it from $168,000 to $10,000. A good reminder that lines of credit can be zapped in an [...]

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By: RxLawDude

RxLawDude — Tue, 09 Sep 2008 00:16:18 +0000

There is one thing that none of the detractors here have addressed: What is the justification of the HELOC lender to decrease their valuation WITHOUT AN APPRAISAL? Citibank is REQUIRING HELOC holders to use a special third party service to find appraisers (at $575 for a $500k valuation) so the holder can justify why the reduction in HELOC limit is not supported. Do you see the inequity here? They arbitrarily pull the plug, and the burden is only on the homeowner to refute (at substantial cost). Sucks. I see a MAJOR class action lawsuit coming over this practice. By the way, lenders are happy to make signature loans with NO COLLATERAL at 7-18% for those with FICO scores of 800. So where is the logic? If I can pay a signature loan with no collateral why would I not be able to pay my HELOC (or risk my credit history) ? I believe that many banks are doing this not so much for exposure control, but in the hope to upsell their customers to much higher-rate credit. THAT is a SCAM.

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By: Winston, CT

Winston, CT — Fri, 11 Jul 2008 19:21:13 +0000

I just had to shovel out extra cash to ship all the windows back that were already delivered and we were about to have them installed. (Heating oil is not that cheap either and these single glazed windows should really go.) Funny thing, I just dropped a check in the mail at the post office to the contractor 15-20 minutes before I got and read the “Burn Notice” from Chase. Thanks God, it’s a small community here and the Postal Lady knows me on a first name basis, because I had to drive down there in a mad dash and ask her to allow me to dive in the mailbox to retrieve my mail with the check in it from there. She was really nice and she did let me go through all that mail and retrieve the one I put in there. I’m quite sure she broke quite a few rules to do a favor for me but at least this is 5k less that is bouncing back unpaid. I’m still awaiting the final tally of bounced check fees and immediately raised interest rates and the like. The funny part will be if even chase will be trying to collect unpaid check fees on the HELOC that they have caused to bounce in the first place. In may case the HELOC suspended effective date of 7/8/08 letter got to my hands 7/10/08. REALLY sharp timing. Maybe, the post office and Postal Ladies did some favors for Chase too in timing these notices. With that said, the supplier of these windows is out of a sale, the Contractor I hired is out of a job. Is that what they call “Trickle Down Economics” these days? I have a gut feeling this one is not going to turn out pretty Folks. The feeling is based on the years of experience with inflation and its effects on the general population that I have witnessed while working for a couple of years in the countries of the former Easter Block. Thanks God, I was paid a Westerner’s wages in hard currency, so I had actually benefited there. But the locals, Boy! They were devastated. As I see it in this case, not even the Mighty US Dollar qualifies as hard currency anymore.

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By: Winston, CT

Winston, CT — Fri, 11 Jul 2008 19:19:13 +0000

Well, I had kept my HELOC from Chase in the past two years almost drawn to the maximum, while invested it and was getting income on it in Europe - where I’m originally from - in Euros. I don’t need to tell you what happened to the EUR/USD exchange rate + interest rates in the past 2-3 years. It just seemed a no-brainer in my case with government guarantee icing on top of the Euro cake. I have ALWAYS paid all my bills including the HELOC on time and have a strong credit score, proven income of 100-130K. I just got 40k back and just could not resist the penny-pinching temptation to pay it temporarily towards the line to save on interest charged. WHAM! Got the letter in the mail within days about a freeze taking effect a date before(!) you even had a chance to read it. Good timing here at J.P.Morgan-Chase! I guess, they were watching and waiting in my account for such an event to hopefully take place. Now, some of my checks already issued will bounce, my credit going to take a hit and probably going to cost quite a few rapidly-depreciating dollars in BS bank charges. If I dispute, they might even have the nerve to tell me that “You know, you don’t seem to be such a good risk lately. You appear to be bouncing checks with several accounts of yours recently!” after them causing the situation in the first place. I thought we had a contract! It just further reinforces my inherent, European, suspicious-genes, “do not trust government or big business”. I let my guard down. Fooled me once, shame on you… Carefully, look overseas for opportunities. This is not a really business-friendly climate now, not even tax-wise, given the fact that my “Old Country” now charges a top 19% flat income tax rate, virtually no exemptions, simplified book keeping etc. Regards, Winston

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By: SadAboutOC

SadAboutOC — Wed, 28 May 2008 10:05:43 +0000

FYI, Citibank has also extended this to their credit cards. Despite the fact I have been a very long term customer and have always paid on time and my balance on the mid 5 figure line was paid off in full every month, I received a notice saying that my 5 figure credit line had been reduced to $500 due to increased risk or something like that. I am glad I had the hind sight to pull cash out of my HELOCs. This is why the economy and home prices are nosediving. If you pay religiously and have tens/hundreds of thousands of credit availability pulled out from you. Imagine what those with less than perfect records are having to deal with.

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By: Mike

Mike — Tue, 20 May 2008 20:47:05 +0000

It's not just Citibank. Yesterday (5/19/08) I received a letter from Chase Bank reducing my HELOC limit to just above my outstanding balance. This line was just increased last year after an appraisal by Chase. Now they claim my home (waterfront -- western NY) has decreased in value by 25%. Bull. Waterfront property is still going up around here. Now I have to hire an appraiser on my own dime and try to get the credit restored, or I can apply for another HELOC elsewhere and buy out Chase. I'm thinking of going with the latter course, as I think Chase has acted in violation of the agreement unless they can document the purported reduction in value. They won't when you call them, and they can't because the value has not decreased. They are playing CYA.

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By: Deme

Deme — Tue, 06 May 2008 19:12:23 +0000

Citi is violating the terms of the Equity Line of Credit Agreement. It states that Citi can reduce the line of credit if "the value of property declines significantly." There are many areas, mine included, where homes have held their value. However, when I made a huge pay-down of $82,000 recently, Citi immediately cut my line to the remaining balance. Therefore, it is clear that this has nothing to do with the value of my home. Sorry, Citi, but you don't get to change the terms! I'm looking for an attorney to handle a class-action suit.

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By: Scott

Scott — Fri, 25 Apr 2008 19:44:28 +0000

I don't care what you all say. Citibank is doing this because the interest rates are down and they're not making as much money as they were a year ago. Why didn't they do this a year ago? Because the interest rates were high and they were raking it in. Now, that the market has turned away from their favor, they're screwing us. Citibank has nearly eliminated my ability to fund my business. I also think it's funny that the only appraisals they'll accept is from Lending Services, Inc. Can you say KICKBACKS?

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