BiggerPockets

Yep,
It happened here in the central coast area of California. My $250,000 Heloc was cut ot $75,000 by Washington Mutual. I have been working on getting it raised back up for the last 2.5 months. After many phone calls and sending a new apraisal to them several times" they always lose it" I am no further along then when I started. Finaly was told by a bank loan officer that they are not really interested in being in the Heloc business anymore. I have 800+ credit. This is just the new reality of a bank that 2 years ago would throw cash at anyone that would stick out their hands. Now they are paying for it.
Note. Local Rabobank will go 6% on a 70% LtoV fixed 2nd x 15 years. I will give them a try.

Now I am one of the HELOC " victims" . One of my $100,000 HELOC's just got cut to $37,000. Ohh well, it's a good thing this is creative real estate and you can use OPM.

Originally posted by "andyedw"

WAMU... what a great company.

They got me too. They cut me by $100k. My house easily appraises for enough to qualify for the line that I had. They just don't want to be in the HELOC business anymore.

8)

HELOC interest rates are based on the prime rate from the Fed, and since the Fed has dramatically cut down the rate, the profit margins for banks have diminished. This is the reason they are pulling back. If the prime rate was to climb a few points, I am willing to bet all the banks will jump back on board.

I have not had a problem with my HELOC from my credit union to date (knock on wood) and they seem to have the lowest rates, lowest fees ($0), and the simplest approval process. I assume due to the fact that the profits are all for the employees and not the big wig bank owners.

Originally posted by "DebtFreeDave"

I just had one of mine cut and my rental property was completly closed. I have about a dozen other clients that had the same thing happen as well.

What is your opinion on the use of a HELOC to invest in RE rental properties since you have been in the lending business?

Granted, the lending market is tightening, but the rates on HELOCs are hard to beat right now.