Home equity lines of credit (HELOCs) are loans on the equity you have in your house. People use them because the interest you pay is tax deductible, like mortgage interest. Just about every Florida homeowner I know has a line of credit in case of hurricane damage. They just write a check or use a HELOC credit card and start repairs right away.
But CNN says banks are closing HELOCs, or at least taking a tough look at unused ones:
As of September, delinquencies on HELOCs were up 47 percent year over year,
according to Economy.com; the numbers are expected to be worse in 2008.
In response, Countrywide has already suspended an estimated 122,000
lines, many in high-foreclosure-rate states, and USAA has frozen or
reduced some 15,000 accounts. Bank of America, Chase and Citibank, among others, are following suit.
Not all HELOCs will be frozen or downgraded, but you can be sure lenders will scrutinize every account -- including yours.
Amsouth/Regions Bank denies that I EVER had a Home Equity...
