The equity in one’s home is something of a comforting safety net. It’s always nice to know that, in the event of a real crisis, you could avail yourself of a home equity loan or line of credit and access the funds necessary to bail yourself out. Unfortunately, many homeowners are seeing that proverbial safety net yanked out from underneath their very feet, as banks clamp down on their home equity borrowing options. Troubled by rising delinquency rates and foreclosure risks, many financial institutions are severely restricting the eligibility of homeowners to qualify for these products, if not pulling the rugs out from under existing borrowers altogether.
More and more consumers are finding to their dismay that devaluation of their homes is making them ineligible for home equity-based lending products… and those who have borrowed in the past may find their outstanding loans cut off with no warning or notice. A select few of these unlucky borrowers have begun to fight back against what they call completely unfair decisions on the parts of the banks. JP Morgan Chase is one of the banks that has found itself on the receiving end of a lawsuit from disgruntled borrowers who claim they were cut off inappropriately.
Jeff and Jennifer Schulken of Cupertino, California have charged Chase with unfairly ending their home equity line of credit, despite their proven ability to repay their obligation. The Schulkens claim that Chase lied to them outright. They were asked to remit tax documentation of their ability to repay the credit line, and then promised that the gesture was simply a formality and that their loan was not actually imperiled. The next day, however, the family found their available credit reduced to zero and their line terminated. These changes are affecting borrowers of all credit and income levels, say experts.
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