Several banks that have provided Home Equity Lines of Credit for Florida homeowners; recently started freezing mortgage accounts.  Normally this would be due to the homeowner missing 1 or 2 monthly mortgage payments or perhaps running a little behind the due dates.  Boy, how things have changed. 

We are receiving several calls from Florida homeowners who have been notified their Home Equity Line of Credits have been frozen and they can no longer borrow more money.  Some, haven’t even used the available credit for the purpose they had in mind when they opened them. Others were tapping their equity lines for expensive necessary items like gas and food. We are in a recession, are we not?

These banks, including, National City and BOA, have reevaluated the home owners current appraised value through their own AVM sytems. Since property values are still declining in Florida, the results are that the Equity Line amount is too large and must be reduced or cut-off completely. Keep in mind, these Equity Lines of Credit are 2nd mortgages; since there is usually always a 1st position mortgage, in place. If the homeowner defaults, the 2nd mortgage holder gets whatever is leftover, or worse, nothing.

If you have a Florida Home Equity Line of Credit and have need for the funds available; it may make sense to draw funds immediately and place in an interest bearing account for near future use. Whether you need to replace you frozen equity line or simply receive a new one; call our office to discuss your Equity Line options at 888-399-0520.

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