<p>Anyone else in this boat?</p>
<p>Took out a HELOC a few years ago and had more than enough credit available to pay the EFC for four years of college. Then the lender sends a letter saying that they’re freezing the HELOC even though our credit and payment history is perfect. Contacted the lender and they said we need to pay for a new appraisal (from one of their approved appraisers - translation: we’ll get low-balled) and send two years of tax returns (even though the original line was not based on income.) College funding evaporated in an instant.</p>
<p>sounds like the lender readjusted the HELOC value to match your lower housing value?</p>
<p>This has been happening to people for the past 3 years - HELOCs being frozen or just plain rescinded by the originating banks. Those who were counting on these funds to pay for college have been hurting. :(</p>
<p>That’s interesting. My wife has a friend that received the same letter a couple weeks ago. This doesn’t surprise me given where home values have gone in SoCal where i live. I’m sure a lot of people are sitting fairly comfortably thinking they have that HELOC fallback not realizing it can disappear overnight.</p>
<p>Now in our case, my bank is doing everything it can to get us to use the HELOC. We still have 50%+ equity in or home. The bank has been sending convenience checks on a regular basis. Just last week they sent us (they said at our request, but it wasn’t) credit cards linked to the HELOC account. Marching orders obviously are to pullback on those with marginal debt/equity ratios, but go hard at those with more equity to make up lost income.</p>