How to thaw your frozen HELOC

Save the planet. Shower pee!

The Federal Reserve offers the latest come-to-your-rescue tips for dealing with a home equity line of credit that's been hammered. Links in the story lead you to still more.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Lenders are freezing, slashing, and cutting off home equity lines of credit, but there's a growing manual of strategies you can use to avoid or mitigate what could be financially debilitating.

Maybe it's better to take the equity money and run before lenders make a move.

Lenders are only covering their assets when they reduce your home equity line of credit (HELOC), much as they are doing with credit card holders, who can also use strategies to get that credit back.

When your lender issued you the credit card-like line of credit backed by your home, chances are, your home value was much higher.

Now with shrinking values, lenders want to shake you down to reduce the chance they won't get paid should you default on your home -- which now may be worth less than the total of your outstanding mortgages.

Consider it a home equity loan meltdown as home equity stakes have been stumped.

Maybe you didn't use proper home equity protection practices.

In any event, the Federal Reserve offers the latest come-to-your-rescue tips for dealing with home equity that's been hammered.

Links throughout this story all also offer additional tips about protecting what you've got and restoring what you lost in the way of home equity credit.

• Read the notice your lender sends you. Your HELOC lender must provide you a written notice if they have frozen or reduced your HELOC. Your lender must send the notice to you no later than three business days after the freeze or reduction. The notice also must include information about any other changes to your HELOC.

• Call your lender. Even if you have a good payment record, if your home's value has fallen, your lender may freeze or reduce your HELOC. Contact your lender if you have questions or concerns about a freeze or reduction.

• Learn why your lender froze or reduced your HELOC. A freeze or reduction notice should include specific reasons for the action. The most common reasons for a HELOC freeze or reduction are, again, a decline in the value of your home, or a change in your financial circumstances.

Understanding your lender's reasoning may help if you want to take steps to have your credit line reinstated to its original amount. For example, a lender may not be aware that you made significant equity saving home improvements to help shore up the value of your home and its equity.

Or, if your financial circumstances changed for the worse and that change resulted in a lower credit score, investigate ways to rebuild your credit.

• Ask your lender how to have your HELOC reinstated. Your lender must reinstate your credit privileges when the conditions permitting the freeze or reduction no longer exist. You may need to put in writing your request to have your line of credit reinstated. Once your lender receives your written request, they must promptly investigate and determine whether your HELOC can be reinstated.

• Remember that your lender can impose fees for reinstating your HELOC. Fees include costs for an appraisal or credit report. Your lender cannot, however, charge you a fee to reinstate your credit line once the condition that caused them to freeze or reduce your HELOC no longer exists.

For more information:

• More home equity news that really hits home is available from the Deadline Newsroom.

• From DeadlineNews.Com's archival vault, still more home equity news that really hits home.

New federal consumer protections for HELOCs in the pipeline.

• Click on the keywords below for more stories on this subject.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

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Rumble In The Real Estate Jungle

Better days may be ahead but, right now? There's a real rumble in the residential real estate jungle. To fight your way through, you may have to put your state in your corner.

by Broderick Perkins
© 2008 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime.

Deadline Newsroom - Hunker down, get a cut doctor for your household budget and brace yourself for some real toe-to-toe mayhem in the residential real estate sector.

The ferocious rate of foreclosures and the hammer lock on credit have crippled consumer confidence and put the national economy on the ropes.

Home prices are down for the count and, in this heavyweight of a fight for home ownership survival, it's likely to only get uglier.

If an effort to stop the bleeding and get housing up off the mat, there's a good chance your state can champion your cause if it's one up on federal efforts to help you save your home.

The Standard & Poors/Case-Shiller 10-City Composite and the 20-City Composite Home Price Indices through July 2008 reached new record annual declines of 17.5 percent and 16.3 percent, respectively. That was the 10th consecutive monthly report of a record decline for the 10-city data.

The weakest markets were in Las Vegas, NV with an annual home price decline of 29.9, followed by Phoenix, AZ, down 29.3 percent; Miami, FL, down 28.2 percent; Los Angeles, CA, down 26.2 percent; San Diego, CA, down 25 percent and San Francisco, CA, down 24.8 percent.

And, it ain't over.

Sixty-three percent of those answering a Deadline Newsroom poll "When Will Housing Recover?" say the housing market won't come back until 2010 or later. Nearly a third, 29 percent, say housing won't recover until after 2010. The 8 percent who said it would recover this year, have likely given up on that notion. Another 29 percent said 2009 will be the recovery year -- also a slim-to-none chance of a winning bet.

Lending credence to the newsroom poll is the documented risk of future home price declines. That risk increased in 94 percent of all 381 Metropolitan Statistical Areas (MSAs) tracked by PMI Mortgage Insurance Co. in its Fall 2008 U.S. Market Risk Index.

PMI said the majority of the increases were "statistically insignificant" but the risk of future home price declines rose by more than 10 percent in 16 of the nation's top 50 MSAs, primarily in areas that experienced major increases in house prices during the boom. Among the top 50 MSAs, 17 ranked in the highest risk category and 16 of those were in California, Florida, Nevada, and Arizona.

Risk scores translate directly into an estimated percentage risk that home prices will be lower in two years.

For example, the highest risk of future price declines was in Fort Lauderdale-Pompano Beach-Deerfield Beach, FL, where the risk score was 99.5 percent. That means area prices have a nearly 100 percent chance of being lower in two years. How much lower? That's anybody's guess.

Other high-risk areas included Riverside-San Bernardino-Ontario; CA (99.5 percent); Orlando-Kissimmee, FL (99.4 percent); Miami-Miami Beach-Kendall, FL (99.3 percent); and Tampa-St. Petersberg-Clearwater, FL (99 percent). Areas with the lowest risk of price declines -- less than one percent -- were in the Texan MSAs of Fort Worth-Arlington; Dallas-Plano-Irving and Houston-Sugar Land-Baytown, as well as Pittsburgh, PA.

The downward pressure on home values, along with the choke-hold on credit makes it ever more difficult for troubled home owners to refinance their way out of trouble or even sell out without a loss. Loan applications are off nearly 30 percent from a year ago, according to the Mortgage Bankers Association.

As many as 3.3 million home owners will default in 2007 or 2008 with more than 2 million of them losing their homes, according to estimates. But it's not just about the foreclosures. Those who manage to keep their homes are estimated to lose some $365 billion in home values due to downward price pressure caused by the foreclosed properties.

The mortgage-squeeze related fallout doesn't discriminate. Borrowers with high credit scores and prime loans also have a tough time refinancing or borrowing against their equity. Buying a home ain't easy either.

Luckily, a growing number of home owners and buyers have state-level housing efforts in their corner.

The exhaustive "Defaulting on the Dream: States Respond to America’s Foreclosure Crisis," by the Pew Charitable Trusts, reveals some assertive, even experimental efforts to mitigate financial harm to homeowners, lenders, local communities and state budgets.

• To help borrowers avoid foreclosure and keep their homes, 20 states (including California, Colorado, New York and Nevada) have launched formal foreclosure intervention or prevention initiatives.

• Sixteen states (along with those above, including, Indiana, Maryland, Massachusetts, Michigan, New Jersey, Ohio and Pennsylvania) have enacted both high-cost lending and foreclosure intervention laws.

• Thirteen states (among them Arizona, Illinois, Indiana, Iowa and Minnesota) have created counseling hotlines to help the foreclosure-at-risk, and several states are encouraging (too often reluctant) lenders to work with borrowers to find alternatives to foreclosure.

• Nine states (including Delaware, Maryland, Michigan and Ohio) have established loan funds that can be used to refinance borrowers who have loans they cannot afford or to provide short-term loans to help borrowers overcome financial difficulties.

• To protect vulnerable borrowers from unscrupulous real estate investors, nine states have created laws regulating firms that claim to "rescue" borrowers from default. Since the downturn, rescue operations have preyed upon vulnerable home owners.

• And in an effort to prevent problematic loans from being made in the first place, 31 states (among them, Arkansas, Georgia, Kentucky, Oklahoma, Texas and Utah ) have implemented laws that address predatory lending.

Check with your state housing, consumer, social or community agencies to determine what home owner and mortgage programs and assistance are available to help see you through hard times.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the new Deadline Newsroom, DeadlineNews.Com's news back shop. In both cases, it's news that really hits home!

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How To Stop ID Theft, Cold

Consumers are proving they can turn back time on identity theft by following a prescribed program of diligent document protection and criminal deterrence.

by Broderick Perkins
© 2008 DeadlineNews.Com

Deadline Newsroom - A well-measured program of preventive steps can protect your identity from theft.

ID theft-related fraud fell by 12 percent in 2007 and 300,000 fewer adults were victims, according to the latest from Javelin Strategy & Research, the longest-running ID theft study in the nation.

At the top of the list of reasons for the decline is "greater consumer vigilance and awareness," according to the report.

When someone steals your identity, you don't wander around aimlessly like some John or Jane Doe. Someone pilfers enough of your personal identifying information --name, address, Social Security Number, drivers license, credit and financial account numbers and the like -- then masquerades as you to make purchases, withdraw cash or otherwise undermine your financial assets and your name.

ID theft can cost you time and money (averaging $691, according to the report) to correct the misdeed and it can ruin your credit enough to prevent you from making major purchases including buying a home.

Companies that manage personal information have improved their ID theft protection measures, but consumers who protect their own personal information is the first line of defense.

Here's what Javelin suggests.

• Move your financial transactions online by turning off paper invoices, statements and checks, including paychecks, and replacing them with electronic versions where offered by employers, banks, utilities or merchants. Avoid mailing checks to pay bills or deposit funds in your banking account. Instead, pay bills online and use remote deposit check imaging services on online banking sites.

This effort rubs out the paper trail. Crooks are more likely to steal information on paper, from personal belongings and through telephone calls, rather than online.

• Monitor your accounts regularly online at bank and credit card websites. Americans who monitor their accounts online are most likely to uncover suspicious or unauthorized activity early.

• Likewise, review your credit information frequently. You can do so three times a year for free at the federally-sanctioned AnnualCreditReport.com by getting one report, from each of the three major credit reporting agencies -- Equifax, Experian and Transunion -- in turn, every four months.

• Reduce unnecessary access to your personal information wherever possible. For example, don't carry Social Security cards, unused credit cards or checks, and don't leave sensitive documents out in the open.

• Never provide sensitive financial information over the phone or Internet, including Social Security numbers, passwords, PINs or account numbers, unless you placed the call directly to a verified and trusted location, such as the number on back of a credit card or statement.

• Add your name to the federal Do Not Call registry and direct marketing opt-out lists to reduce solicitations that could be bogus.

Even as overall ID theft has fallen, "vishing," criminals using telecommunications, voice over Internet protocol (VoIP) and like methods, is on the rise. That's because, as more consumers shift more transactions to secure online services, thieves are becoming more creative on the telephone claiming to represent non-profit and charitable operations.

In the same vein, wireless phone accounts have become the most frequent types of new accounts opened fraudulently by criminals using stolen data. The trend exceeds that of fraudulent new credit cards, loans, checking or savings accounts.

• Install and regularly update firewall, browser, anti-spyware, and anti-virus security software on your personal computer, and keep operating systems updated. Updates typically come with spyware, virus and other protections.

• Consider placing a credit freeze on your credit report or your child's credit report if you know you won't be using credit for some time. Child ID theft is on the rise because thieves know you and your kid aren't likely to check the child's credit report for some time due to a lack of credit use. Check your state's "credit freeze" law. The cost may be nominal or free. The three credit reporting agencies offer the service for a fee.

• If you are an ID theft victim, report it to the police, affected accounts, and call any one of the three credit bureaus to have a fraud alert placed on your account to prevent future infractions as you sort out the mess. Contact one bureau to place a fraud alert on your credit report and that company is required to notify the other two so that they too can place an alert on their versions of your report.

More ID Theft news that really hits home.

Also see DeadlineNews.Com's ID Theft Archives

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© 2008 DeadlineNews.Com

Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

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