Line of credit woes (Union: mortgage, credit card, house)
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I'm a little upset.
I received a letter from my bank (HSBC) regarding my LOC. This letter explained they have the right to examine my current financial status and adjust my line of credit as they see fit. I have to fill out a form, provide tax returns, etc. Standard stuff.
The line of credit on my house is not exessive, even by today's standards. I am responsible, have no late payments and am not upside down in my mortgage. Matter of fact, hopefully I will be selling my house for a profit soon.
On the one hand I understand their position. HSBC does things above board, legally and ethically. This is why you have not heard anything about them being in trouble and asking the gov't for a bailout. They did not get caught up in "Drive by apprasials" during the refi boom and stuck to their own procedures/rules regarding refis and LOC's.
That being said...
I have a feeling they will take away at least some of my credit and this makes me angry! There is no reason for them to do this. I signed up for this line, paid a $300 apprasial fee and it's supposed to be for 20 years regardless of what happens to the value of my house.
I think they will reduce my available credit for no reason other than everyone else screwing up!
I'm tempted to write myself a $50,000 check just to mess with them.
I love the way banks dictate to you the rules then change them the moment things get tight for them.
That being said...
I have a feeling they will take away at least some of my credit and this makes me angry! There is no reason for them to do this. I signed up for this line, paid a $300 apprasial fee and it's supposed to be for 20 years regardless of what happens to the value of my house.
I think they will reduce my available credit for no reason other than everyone else screwing up!
Yes, you may end up paying for the sins of others by having your LOC reduced because banks are tightening up on any excuse they can, even if you personally never did anything wrong. I know a few people this happened to.
Add me to the list. Countrywide sent us a letter saying they were freezing our HELOC because housing values in our area have dropped. Period. Nothing personal. We have excellent credit, we've never been late, we're not upside down, etc. And, like you, we spent money on the appraisal, document fees, blah blah blah. So much for renovating the bathroom this year.
Add me to the list. Countrywide sent us a letter saying they were freezing our HELOC because housing values in our area have dropped. Period. Nothing personal. We have excellent credit, we've never been late, we're not upside down, etc. And, like you, we spent money on the appraisal, document fees, blah blah blah. So much for renovating the bathroom this year.
The same happened to my daughter and son-in-law and they had their HELOC at a Credit Union! They used part of their HELOC to fix the bathrooms and the lower level and were saving the balance to do other home improvements, like siding, etc; they received a notice that the balance was no longer available! Like you, they have excellent credit, never late, not upside down, etc.--no matter.
Unfortunately, us law-abiding citizens who pay on time and did everything right in this housing market are getting penalized for the ignorant masses and bank screwups. Definately look into it an make sure they can do that...something tells me they can. I have HSBC for my mortgage, and they are usually on the up and up.
I must be really stupid. I paid 8K to refi and get a lower interest rate back in '05. Silly me-I should have stopped paying my mortgage and they would have lowered it for free!
The same thing happened to us. We had a $70,000 loc and had about $35,000 left on it. Bank of America said ; nope, they were closing the rest of that line. We are not upside down, and like you, have always paid on time, credit score of over 800.
Deadbeats have ruined it for the rest of us who pay on time.
It was only a matter of time, I guess. I too had a credit card (25K limit, haven't used it in 2 years) that was closed under the guise of "We're doing this for your safety, since it's possible that you weren't even aware that you had the account anymore" nevermind the fact that I had just updated me contact information with them a couple of months prior to that. Another credit card with a 30K limit on it (MBNA) was reduced to 15K, again they were doing me a favor apparently - my spending patterns didn't appear to them to require the higher limit, so they did me a favor and lowered it.
Anyway, it's fine by me. I understand why they had to do it, but I wish they wouldn't try and pawn it off as "we're doing this for you". I obviously have been very responsible with my credit, so why should they suddenly think I'll become irresponsible and use more credit than they now think is acceptable? Tell me like it is "we granted you credit based on market vehicles that were once believed to be healthy and now realize that we got caught in a huge ponzi scheme and have to now re-adjust assumptions that govern your credit line."
I guess that wouldn't go over so well. In any case, at least these weren't lines of credit that I had to pay application fees for, like some of you folks who were promised those lines for X number of years.
I suspect things will get much worse before they get better.
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