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Lenders Cut Home-equity Loans

Homeowners left in the lurch

When he took out a $206,000 home-equity line of credit in 2007, Kevin Hall thought he'd secured all the funding he'd ever need for a major remodeling project at his Carlsbad home. That's why his heart skipped a beat when he went online in February to transfer money from his account. He discovered that his credit line had been slashed to $72,000.
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Loans Home-equity Cut Lenders

I am glad they were able to secure the funds required to finish the work. I do ponder though why put more into a house then it is worth. If thing are dropping that much perhaps the renovations should be halted till the prices returns to where it was before continuing.

In my own home I always look at my market value and where it is heading before putting thousands let along 10's of thousands into renovations.

Lenders Cut Home-equity Loans History & Civil Business Politics

While it may be legal, it does not seem ethical for the lender to decrease the line of credit without proper notification to the borrower. I do not understand why someone would want to take a loan against their entire equity. Practices like that not only leave no buffer against inflation and/or decreasing home values but it would take a lot longer to pay off your mortgage resulting in even more interest paid.