Trying to Tap Into Home Equity? We'll See

Los Angeles Times (02/01/08); Kristof, Kathy M.; Reckard, E. Scott; Colker, David
Thanks to a drop in residential values that has stripped them of most or all of their equity, tens of thousands of homeowners are finding themselves shut off from access to second mortgages. Countrywide Financial Corp. and other lenders are notifying clients that they no longer can borrow against their home equity lines of credit, usually because what they owe on the real estate now surpasses the property's market value; others, including IndyMac Bancorp and JPMorgan Chase & Co., are cracking down on eligibility requirements to open new credit lines. Second mortgages were available for the taking until about six months ago, when home delinquencies and foreclosures took off. As a buffer against financial straits, lenders are beginning to mandate that borrowers maintain a significantly bigger share of equity in their homes.