Lawsuit Filed over Cut in Home Equity Credit
Posted: Monday, February 9th, 2009 at 1:45 pm
A bank’s decision to cut the home equity line of credit for many of its customers has resulted in the filing of a lawsuit. The lawsuit questions the decision of the Cleveland bank, AmTrust, to reduce home equity lines of credit for many of its customers.
The bank said that the reason that the home equity line of credit had been reduced in this way was because of the widespread fall in house prices and equity levels for homeowners. However, this could really impact upon the many people that are relying on their home equity in order to get through financially during the current crisis.
Officials are questioning whether the bank can simply go ahead and cut the amount of home equity credit available to these homeowners without first revaluing their properties.
One councilman said that he used his equity to carry out some work to his home. He said: “I had all the walls torn out and I was going to have the cabinets resurfaced, some new countertops put in and update some of the electrical. The first three checks that I wrote off the line of credit… bounced.”
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