In the Latest Chill for Homeowners, Banks Are Freezing Lines of Credit

Wall Street Journal (07/01/08) P. D6; Hoak, Amy
HSBC Holdings PLC, Bank of America Corp. and Washington Mutual Inc. are among the mortgage lenders looking to avoid additional losses by reducing or freezing home equity lines of credit, and there are reports that some homeowners with substantial incomes, excellent credit scores and plenty of home equity are being affected by the tightening. Experts note that a frozen home equity credit line could cause problems if borrowers are in the midst of renovations or need the money for college tuition, but they insist that some customers are better off without access to their equity. Those frustrated about a lender's decision are urged to file an appeal, have their home reappraised, look for a new lender, take into consideration that obtaining another credit line could take a long time or open a savings account for emergencies.