Posted on 08/27/2008 3:52:38 AM PDT by TigerLikesRooster
Posted on Wed, Aug. 27, 2008
Wachovia cutting home-equity credit lines
By Harold Brubaker
Inquirer Staff Writer
In the middle of remodeling the kitchen of their Gloucester County house, Paul and Julianne Gablin received a letter from Wachovia Bank canceling the line of credit they were using to pay for the project.
Luckily for them, the Gablins own a house in Florida with another line of credit from Wachovia and were able to tap it to pay for the custom cabinets delivered yesterday.
Still, the episode has soured him on Wachovia because he has always made his loan payments, Paul Gablin said yesterday.
"The way they are acting, it must mean they are desperate," said Gablin, a retired Air Force pilot who flies internationally for UPS Inc.
Wachovia is the latest of the nation's big banks to close or reduce the size of home-equity lines of credit in response to the residential real estate downturn.
(Excerpt) Read more at philly.com ...
Woman robs Wachovia bank in downtown St. Petersburg
Seems that when it rains, it pours.
Ping!
I despise Wachovia. Several years ago, it gobbled up several very good local banks back home and changed their checking and savings policies overnight to try and squeeze as much $$$$$ from their new customers as they could, including my mom and dad.
There was a small community bank in my area years ago whose motto was “safe and conservative.” You won’t find many banks with that motto today.
I share your feelings. My son had a miserable experience with them. I felt like I was paying them ransom money to get him out of there. They go after college kids with a vengeance and then screw them to the wall with petty fees, etc.
If you think the bank is bad, you oughta see the kind of sleazy crap they pull off on the securities side of their organization. Disgusting. In another couple of hours, I’ll be in the place where half of my time is spent looking at Wachovia garbage.
I see more of a problem with home values than with the bank in this story.
or prudent action in a time of falling prices? I'm thinking the latter although that doesn't rule out the former.
They bought my mortgage from my lender last year. My property tax was due in October. Wachovia failed to pay it out of MY escrow account. I started getting letters from the tax assessor stating my house would be auctioned in May, so I called Wachovia in February. They hemmed & hawed for several weeks before paying the tax 4 business days before the deadline.
I will never do business with Wachovia again!
They took over my bank in 1997 and soon sent me a crude letter about paying my lock rent on time. Completely ignoreing the fact that I had been having it paid from my checking acct. automaticly for several years, when it came due. I gave up the box and switched banks shortly.
I’ve been a Wachovia customer for about 3 years now. They are good for the most part, but some compaints:
1. It takes too long for transactions to show up in my account (via the website). Sometimes up to 3 days! When I was with Chevy Chase, transactions showed up instantly.
2. The CD rates are extremely stingy.
3. The branch office I use has only about 1/3 of the parking space needed.
This happened to someone I know. Bottom line: They paid too much for their house. When real estate devalued, it put the lender at risk.
Happened to me too. Different bank.
I’m in the process of writing a nasty letter to the bank over it.
Not if the borrower has made every single payment on time and is working on paying off the loan!
That argument is male bovine fecal effluvia.
A home equity line of credit is a loan secured by the value of the property. When the value declines, the security disappears, and so does the basis for the loan.
The borrower’s credit worthiness has nothing to do with the bank canceling a loan predicated on being secured by property.
People with good credit are perfectly free to shop for unsecured loans, just check out the difference in terms.
They are changing the terms of a contract between the borrower and the lender. When the lender sets up a home equity loan with the terms that the borrower can access the paid-off principle as a line of credit and then renegs on the feature of the loan because of a devalued asset, it still changes the terms of the original contract.
It also really sucks bigtime that you are penalized for others’ greed like this (both over-leveraged borrowers and lenders).
You cannot guarantee what the buyer is going to do. Would you lend $400k on a house that is only worth $300k? You are borrowinf against the equity on the house. If there is no equity to cover it, you are screwed. These people are a couple of paychecks away from default and the bank knows it.
I would bet they are not “changing a contract”. Buried in the fine print is a clause that allows them to adjust terms or cancel the loan. I would also bet it is not an unsecured loan, and an important part of the loan terms is that the asset retain its LTV. Regardless of whether you think you are pulling out principle, you are piling up the debt on the property.
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