Three months ago we let you know it was coming. Last week Wells Fargo made the move (tightening local lending standards for HELOCs). And according to the San Francisco Business Times, Washington Mutual appears to be following suit:
Washington Mutual Inc. has slashed or suspended $6 billion in available home equity credit to its customers in an effort to reduce its risk in a flailing housing market.
If they haven’t already been notified, WaMu’s customers across the country will learn of the change to their credit availability in a letter mailed to them in the next several days. The bank declined to disclose how many customers will be affected.
If a borrower’s home has depreciated — regardless of credit history — the line of credit will likely be reduced because the equity has fallen.
That last sentence seems like common sense (although that hasn’t necessarily been a prerequisite for lending over the past five years), and unfortunately we don’t have any additional details. If any plugged-in readers should happen to receive one of said letters, please feel free to pass it along (tips@socketite.com). You know we’d do the same for you.
∙ When Hell HELOCs Freeze Over… [SocketSite]
∙ Wells Fargo Tightens Local Lending Standards For HELOCs [SocketSite]
∙ WaMu reduces home equity credit to homeowners [Business Times]
Is Washington Mutual really trying to say that obtaining a HELOC would be absolutely prohibitive? Man. Some of those Washington Mutual folks should just write fake offers on some property in order to have a better grasp of the loan details they constantly announce on the Internet.