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Blogger King |
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July 2008
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For years homeowners have treated their homes kind of like a cash machine, by taking out home equity lines of credit. They can be used for anything from home improvements to college tuition. 3 Comments |
Somewhat related to this, are accounts that Washington Mutual Overdraft Lines of Credit (ODLOC). These are unsecured accounts WaMu set up several years ago to cover any overdrafts. Last September or October, WaMu took action, across the board, without notifying account holders, to raise the ODLOC interest rate to 18%. I was told by my branch that these loans were "out of favor" at the bank and that no notice was necessary. Interestingly, these accounts are covered by automatic payments from checking, so, although signature loans, they are rather secure with no late payment problems. Also, WaMu didn't adjust the payment amount, so the consumer paid the same, just less on the principal (more interest for the bank). Fairly hard to detect that a change was even made! I was told the recourse was to pay the account off or reapply for a different loan. Friendly. Wahoo.
I have also been affected by the pull back on home equiry lines I have a line through BANK OF AMERICA i had a line of 50,000 the pulled out 19,300 with out any notice to me this was on the 25th of march today is the 2nd of april and i still have yet to receive a letter to let me know of the changes i noticed them through online banking i went in to the bank and spoke with the branch assistant manager who was unable to answer some of my questions or give me any answers to how the determined to reduce my line. I am in the middle of remodlimg my kitchen and doing many other home improvements which is the reason that i got the line in the first place now i have to figure out how to finish the work on my house I am disputing the drop in my line but that can take 7-10 business days well see how that goes
I also had my Equity Line reduced with out no notice. I had wrote a check to my checking account to finish home improvements and the check was returned. This caused me fees and everything else. My Equity Line is with Citibank the mortgage I owe and including the line of credit I am still in the market place. The only thing at this point is look into re-financing both loans and pulling my whole banking relationship to another bank. Some how the manner in which they pull these loans does not seem right.