Realtors beware, your clients down payment could be disappearing

Many people use their home equity lines as down payments. If you are a Realtor you need to be aware that banks are pulling back and canceling many of them. I have had mine canceled in recent days. I would advise you to tell your client to pull the money out now and not when they need it. Because when they need it, it may not be there.

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Why it's bad news that millions of home equity lines are bing cancelled

From the previous post I reported on my home equity line of credit or heloc was cancelled by National City. This is bad news for the economy because millions of home owners were tapping there home equity lines to make purchases, buy cars, make home improvements or just go on vacation. With these credit lines no longer available, this only means less money being put into consumer spending and the economy. My guess would be that it will take a few years to get the economy turned around. Hopefully lenders will loosen their lending guidelines which will make it easier for people to get money. This would help.

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National City cancelled my home equity line

Be on the look out for a letter in your mailbox alerting you to the fact that your home equity line has been reduced or canceled. This is my second one that I have received in the last 30 days. The line on my rental property from Washington Mutual was reduced $20,000 and now my line on my home of $60,000 was completely taken away by National City. They may not honor any checks that were written so you need check on that. To answer the question, a bank can do this on a second mortgage? It is definitely in the provisions of their notes to reduce or suspend any credit line.

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