Let’s see…..Nat City, Chase, Citi, etc were offering HELOCs like there was no tomorrow. Prime minus X was a norm. If your value went up, we’d be happy to rewrite your loan and give you more.<br /><br />Now…..remember that great idea we gave you? Plan for your kids college education. Use the credit line to slowly pay out college fees and just pay interest only on the money you use and pay interest only when you want!<br /><br />And values of property. The only time that was an issue is when you bought, sold or refinanced.<br /><br />Now, all of a sudden even though your 750 credit score has not moved, your HELOC lender has withdrawn their dream that they gave you.<br /><br />In a real life situation, someone who has two kids in college, let’s say a junior and a freshman, who has a perfect credit, a real job gets their credit line lowered by $100,000 by means of a form letter.<br /><br />Now, since values have dropped through no fault of their own, can’t get a loan for the kids school and makes too much money for financial aid is stuck.<br /><br />It is ludicrous.<br /><br />Why when values were going up, the banks did not automatically increase credit lines? I think you get the picture.<br /><br />Congress needs to address this. Base the existing loan of the ability to repay (credit and income) and not computerized values done by a person in a cubicle thousands of miles away from the property.<br /><br />I call on everyone who is hit by this issue to call their MOC and a class-action plaintiff’s attorney (I actually know a few).