It wasn’t that long ago that mortgage lenders were eager to extend credit lines to anyone with a pulse and a property title. Alas, the industry’s mood has turned with the swooning of housing prices: frugal caution has displaced wild abandon. Many homeowners, unaware that their lines of credit could be curtailed summarily, have been unpleasantly surprised.
Countrywide Financial, infamous for its subprime loan exposure, led the way by freezing over 100,000 home equity lines of credit (HELOCs); in many cases, the borrowers were not delinquent, but their levels of home equity had dropped due to price declines. Countrywide’s new …Read More