Thursday, January 31, 2008

Countrywide starts turning off the spigots

Great article from the LA Times regarding Countrywide telling customers that they have upside mortgages so they can not borrow from their HELOC anymore!

Trying to tap into home equity? We'll see

Tens of thousands of homeowners with home equity lines of credit are getting a rude surprise: They've been told by their lender that they can no longer take money out on their credit lines because sinking home prices have put them "upside down" on their mortgages.

Countrywide Financial Corp. sent letters to 122,000 customers last week telling them they could no longer borrow against their credit lines because the total debt on the home exceeded the market value of the property. The lender says it is using computer modeling to determine which of its customers would have their cash spigot shut off.

This is what I am trying to find locally - especially people who are trying to sell houses with these upside-down mortgages.