Lenders Cutting Off the Home-Equity Spigot

For more than a decade, banks encouraged homeowners to tap their equity for everything from paying off credit cards to covering college tuition.

Now lenders are abruptly shutting off the spigot.  More than 100,000 homeowners at one lender already have been told that their home-equity lines of credit have been frozen and they can’t use them to borrow more money.  Others have seen their credit limits abruptly lowered.

Meanwhile, lenders are tightening standards so that getting a home-equity loan in many markets is more difficult, even when the value of your home is still well above what you owe on it.

Loan experts predict many more homeowners will find themselves cut off from home-equity loans and lines of credit as lenders flee the so-called second-mortgage market.

Has your lender frozen or cut off your home equity line?  We’d love to hear about it.  Use the "comment" link below to (vent) tell us about your experience.