AboutBobbi Buehl Expertise Home mortgages is my expertise
Experience Experience in the area 15 years Organizations Mortgage Brokerage Education/Credentials BS in Chemical Engineering, BA in Sales and Marketing. Licensed Loan Officer for 6 years and I have worked as a Loan Officer for 15 years.
Question I have a home equity line of credit with Countrywide. I received a letter today, January 15 dated January 10 stating that as of the date of this letter my equity line would be lowered as the value of my house has fallen. I currently have a 22,000 line of credit having used 13,000 so far. First of all, I have a check for 3,000 that has already been mailed to cover my taxes that I wrote from the line of credit. I know it has not cleared yet. What will happen to this check. The letter did not state a specific dollar amount that the equity line would be lowered to. Second, can they do this? No one has been to my house to appraise my property since the initial home equity loan, at which time the house value more than covered the 22,000 line of credit. The way I see it, Countrywide signed a contract to provide me with 22,000 equity line and I signed a contract to repay that amount. I have never been late on a payment. Can you please give me some advice as I am concerned about that check for the taxes and am also in the model of a remodel project that some of the remaining credit line was earmarked for. This just doesn't seem fair. Thank you very much!
Answer Dear Vicky,
The first thing you need to do is contact Countrywide and find out your new credit limit. Hopefully it's enough to cover your tax bill. Unfortunately, Countrywide has a clause in the loan paper's that stipulates that they can change the terms of your home equity line at their desecration. Just so you know, this would never happen on your 1st mortgage, but 2nd's are a different animal all together.
If after talking with Countrywide you find out that its not enough to cover your taxes, call the County immediately and explain to them what has happened and make arrangements to make payments on your taxes due.
Also, if you aren't in a low 6% interest rate right now, you may want to consider refinancing and putting the home equity balance with the first and saving yourself a lot of money in the long run.
I hope that helps answer your question and you're right, it isn't fair the way Countrywide has going about this! In case you weren't aware, Countrywide was bought out by Bank Of America last week, even though they are still going to operate under the Countrywide name, or for the time being anyway.
If you have any more questions, please feel free to contact me at Bbuehl@amerifirstlend.com.
