I just spoke with a homeowner who bounced a check to her tree service because Citibank suspended her home equity line of credit before notifying her. When she finally received a notice from Citibank in the mail, it suggests that (PDF link) Citibank is apparently suspending home equity lines of credit nationwide due to falling home values. The same thing apparently happened to Nina at Queercents just over a week ago.
The Citibank HELOC contract apparently gives them the right to suspend or reduce the credit limit of accounts when the homes value drops too far. But Citibank based its decision on a general finding that “home values in your area, including your home value, have significantly declined,” not a specific appraisal.
Further, Citibank has not simply reduced the available credit limit to compensate (which would be difficult, since it does not actually know the home’s value), but has suspended the account entirely. Andthe biggest problem, as my caller demonstrated, is that already-written checks will bounce, because Citibank is suspending accounts before it notifies its customers. Surprise!
Obviously, since a HELOC is tied to the value of the home, lenders should be able to reduce the available credit if the home value declines. But they should also (1) have to show the home value actually has declined, and (2) notify its customers before it suspends their accounts.
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{ 58 comments… read them below or add one }
happened to me, too….so my citibank payment is bouncing…..bastards!
Not only are they suspending the loans, but Citi is trashing our credit ratings also. It is reported as ‘suspended” and a “major derogatory” on our credit reports. Our payment record is PERFECT. And we are in the processes of applying for loans for our new house.
Citi has quit taking my calls so I am nfiling complaints with my Senators, major news papers, CNN… anybody who will listen.
Well, people, you can rest assured it is not just just Citibank, but Bank of America, and probably every other bank, too. Banks are in effect getting cash from the feds for their existing mortgages. Another get out of jail free card available only to rich, influential campaign contributors and lobbyists provided by taxpayers. Why jeopardize profits with lines of credit. Banks also just received a large (.75%) interest rate reduction that they are not passing on to their clients. Instead, using it to reduce their onerous sub-prime debt. Who says crime, negligence, greed, corruption, and stupidity does not pay? One just has to be a big player. Bear Stearns today, perhaps the rest of the industry tomorrow.
Good thing for those Golden parachutes. While the CEO’s leave their companies, shareholders, and taxpayers in tatters; at least they have a nice, big, fat, retirement nest egg.
stopped in a citibank yesterday and found out they are closing all the branches in my city.
We just had the same thing happen over the weekend. Got a letter this Saturday (4/19) from Citibank notifying us that on April 15th our HELOC loan amount had been slashed by more than 50% due to “declining home values” in our area. Since we had no prior warning of this, we had just gotten new windows installed and cut a check to the vendor on April 11th – four days before the loan reduction went into effect. When the vendor (a personal friend of my husband’s) deposited the check, it bounced. This resulted in a huge problem for the vendor who, assuming the check was good (AND IT WAS!!!), used the payment to pay some bills of his own.
Now, our credit is shot because it looks like we maxed out our HELOC, when in reality we were only using 50% of the loan amount at the time, and we have been thoroughly embarrassed by a bounced check that never should have bounced in the first place.
I’m calling every news outlet in Atlanta, as well as our legislators, to report Citibank’s horrible handling of the situation.
OK- So the exact same thing just happened to us. Over $1000 in bank fees alone for the bounced Citibank check…. While this is a horrible situation (at least for us) and imbarrassing as well, let’s look at a few points:
1) If Citibank were to warn us ahead of time that the HELOC was going to be lowered, half of the people out there would max them out PRIOR to the loan being lowered, ultimately giving no benefit to either Citibank or those of us who are genuinely responsible with our loans, thus creating an even deeper mortgage crisis overall.
2) Citibank acknowledges that when we deposited the check, we did so in good faith and have reimbursed 100% of the lost funds due to the bounced checks.
3) Now… our home has not declined in value anywhere near the difference Citibank cites and in order to get the HELOC reinstated to the original amount, they charge a fee for another appraisal. I feel like if the value is still in the neighborhood of where it once was (ours happens to be- A friend who is an appraisor verified), then Citi should be responsible for the cost of the appraisal… By the way… Citi only approves of 1 biased appraisor in our area.
Just my 2 cents worth… It’s a bad situation for all, but at the same time, it’s about time that banks became responsible for what they are lending instead of simply expecting the government to bail them/us out when in over our heads.. Ultimately it costs us all…
Same for my wife and I. We checked our balance on April 15th and were told we had $40,000 left on our equity line. Wrote two checks for $5000 each, one in her account, one in mine. Checks went through fine and were apparently honored.
On April 24th, we received letters dated April 21st stating that both checks were being returned for insufficient funds, as we only had $500 left in our account at the time we wrote the checks. Needless to say, we have been scrambling and moving money to prevent our other checks from bouncing.
Citibank customer service is going to try to run the checks through a second time and allow them to be paid. They said that based on our credit rating and the low CLTV of our account, that we probably should not have had our account reduced or frozen.
Apparently they went through and arbitrarily froze everyone’s account at their current levels. Since most of these accounts are tied to the Prime Rate, they are no longer making the exhorbitant interest that they were getting when the Prime was at 8.25%. Now that it is around 5%, there is no profit motive for them any more.
Our politicians have to take action against this type of arbitrary modification of credit contracts. It is obvious that a contract means nothing to these big banks and credit card companies. They can change, cancel or ignore the very contracts that they have written for these accounts and the government turns a blind eye and a deaf ear to the complaints from the public.
Same thing happened to me. Citibank lowered my available credit to (coincidentally?) $46 more than my outstanding balance.
I use the equity line to fund my business. Now I have to scramble to find new sources of funding just so I won’t go out of business.
Also emptied my entire savings account into the loan knowing that I wouldn’t need the money for a couple of months and I would save the interest payments and pay it back later. Doh!
Now I have no way to fund my business and my personal savings account is gone. To top it off, not only did I bounce a check for the same exact reasons but the bounced check wound up costing me nearly $500 in overdraft and bank fees.
Citibank said my only recourse is to have another appraisal done on my house at my expense. But, and get ready for this, I have to use their appraisal company. They will not accept appraisals from ANYONE else! Can you spell KICKBACKS?
Thank you Citibank. You’ve ruined my life.
We had the same thing happen. We were about to submit plans to the city for a major reconstruction of our home and we secured the heloc last year for that purpose. We got our letter, called, got the name of the appraiser, paid the $600 sent a copy of it to citibank, along with a nice letter explaining our situation, that when we would be done with the reconstruction of our home it “would support” the value of the loan. We sent a copy of the plans, soils reports, engineering etc etc. To show that we were going to use the money for that purpose and to request them to unfreeze our Heloc. We just received a letter yesterday saying ” Thank you for your recent EQUITY SOURCE ACCOUNT application. We regret to inform you that we are unable to approve your request for the following reason(s) _ DELINQUENT MANNER OF PAYMENT ON CREDIT OR OTHER OBLIGATIONS-”
Our credit is spotless it is exactly the same it was last year when we applied. The only thing my husband has is a taxlien from 2002 in the amount of 273 which was released the same year. By the way the same lien was there last year when we applied. The new appraisal showed a $40,000 decline in the value of my home which at least should have given us $72,000 back from our heloc if you are to rethink a new loan amount based on 80% Not the $150,000 we had requested to originally unfreeze.
CITI has decided now that there is something in our finances that they do not agree with ( nothing has changed) and they want us to let them know once our “financial situation” changes. Nothing has changed since last year.
I am not understanding this, first CITI says get a new appraisal and now they say something is wrong with what experian is saying in our report. In our original letter it specifically said we were not getting our heloc frozen because of payment history, that they appreciated the way we had handled our account so responsibly and that we were valued customers.
CITI basically sent us chasing our tails, wasting money in appraisals, shipping etc, waiting for them to come back with a decent answer.
I called my friend who is a loan agent and asked what the current guidelines were for a heloc from CITI and she informed me that they stopped offering them back on March 18th 2008. So basically there are no guidelines to go by, qualifications to meet because the product no longer exist. I dont know who is underwritting what at their end but according to my contract ( which I sent along with my package ) we have met all of their requirements, we got a new appraisal, sent it with supporting evidence; the reason they listed was due to declining home values, we proved our home was not affected drastically, the contract says they have he right to freeze our account if they think we can no longer pay for the loan; well nothing has changed since last year, so I dont get where they are coming from.
I am going to ask for the real reason they declined our request, it says in small print in the second letter that we can request to find out if they used other sources to base their decision. I am not sure where this will take us but I will take it as far as I can, I didnt make the rules, it is spelled out and signed in my contract the reasons why they can freeze my account, we do not meet any of them; it seems to me that they are making new ones as they go. It doesnt seem fair, it is getting really scary out there.
On April 24 I received a letter from Citibank stating that a check in the amount of $600 hadn’t cleared my HELOC account due to insufficient funds. I knew that my line of credit was $35K & wasn’t anywhere near that amount. I looked at my last statement & saw the amount had been reduced by $12K which is what caused my check to bounce. Of course this was check that I had put in my credit union checking account to pay bills & now have to make up the $600. Guess where my stimulus check is going?
I called Citibank & was told that a letter was sent to my house on March 21st explaing the reduction in my HELOC. I know for a fact I never received a letter from them. If I would have do you think I would have written a check that bounced??? I also got the same song & dance as everyone else. My line of credit had been reduced because they said the value of my house had dropped $30K. I find this ironic since my property tax statement issued by the city of Minneapolis even though lower then last year was still $13K MORE then what Citibank was saying the home was worth. I asked what I needed to do to get the rest of my credit reinstated & I had to get an appraisal which was going to cost me $310 & had to be done by LSI (the only appraisal company they work with), plus get a statement from my mortgage company as to what my mortgate value is. This information would then go to their underwiting department “for consideration”. This means that there was no guarantee that I’d get the $12K added back to my HELOC. I told them to forget it & hung up.
This has totally thrown my life into chaos. That was my emergency cushion which is now gone & leaves me with no extra money at all for any home improvements, car repairs, etc. I think how they handled this was totally unprofessional. I have impeccable credit which I’m sure is flawed now because of how poorly this was handled. I hope none of the people who read this ever do business with Citibank again. They suck!
I have started a blog on this top to share information on this scam at http://citiscam.blogspot.com/
I am so angry I started a BLOG on the topic at citiscam.blogspot.com. The public needs to be aware of these types of shenanigans and speak out against these unethical practices. Clearly this was not well planned or thought through by the executives that made the decisions to proceed in this manner.
I just got my letter from NationalCity. They suspended the entire HELOC, this just 2 months after I paid 40K to zero the balance using my 401 K pay-out from my previous job, knowing I had that HELOC if needed. Thanks for nothing NationalCity. Reading above, I will cancel that account tomorrow to avoid the possible credit nightmares some are having, no access to funds why have the account????
Just received a letter from Chase Bank on 5/19/08, reducing my HELOC by 40% due to purported drop in my property value by 25%. The HELOC was just increased last year after Chase’s own appraisal. The decrease in the line of credit brings it just about to the level of my outstanding balance, so I cannot proceed with planned projects this Summer. There has been no real decrease in property values in my area in that short period. Luckily I had no outstanding checks like some of the commenters on this site. The only way out of it is to hire another appraiser at my own expense, and even then there is no guarantee that they will restore the credit. Another option it to apply elsewhere and have the new bank buy out Chase. The way this happened — without any advance notice that my credit line was being reviewed — makes me want to be done with Chase altogether.
I received a letter from Chase today stating that my HELOC has been shut down. If I had written checks, (which I hadn’t, thank goodness) the checks would not be honored.
The letter states, “We appreciate that you have handled your home equity account responsibly, and want to make sure you know this change is being made simply because your home’s value has declined.”
They “used a proven automated valuation method to estimate your home’s value at $226,000.” Strange that I have three CMAs sitting here that value my home between $250K – $275K. In fact, I just put my home on the market in that price range.
If I want to restore access to my Chase HELOC, it instructs me to obtain a full FNMA appraisal and send it to them for review. It doesn’t say they will accept it, just that they will review it.
I called Chase and asked them if they were wrong about the value, would they reimburse me for the FNMA appraisal. They said no.
So… I make my payments on time, every time. They use an automated system to determine the value of my home and shut down my account. To reinstate the account, I have to purchase a full FNMA appraisal, which Chase may or may not accept. If I am right and they are wrong, I will have spent a few hundred dollars to get back what I already had and didn’t abuse. Go figure…
My advice – if you have a Chase HELOC and have not received your letter yet, go directly to the nearest branch and withdraw all the funds you have available and put them into an interest bearing CD.
HELOC Freeze Investigation
We are investigating several home equity line of credit (HELOC) lenders for their practice of freezing HELOCs based on claims of reduction in property values without obtaining actual appraisals to substantiate the decline in value. This practice may violate state and Federal law as well as the terms of HELOC policies.
If you would like more information regarding our investigation or have any information that you would like to share please contact Noah Sacks at noah@moginlaw.com or call toll free 888-557-2545.
The Mogin Law Firm, P.C. is a highly experienced Southern California class action firm. We specialize in representing a select clientele in antitrust, unfair competition, consumer protection, false advertising, investment, complex litigation and class action cases. Other law firms frequently seek our expertise.
This post may be considered legal advertising. No legal advice is offered and no attorney-client relationship or duties are created or intended. Attorneys associated with The Mogin Law Firm, P.C. are licensed in California.
I received a letter from citibank that my home value fell they cut my line of credit with 75% I had an appraisal done which indicates an increase of $75000.00 in value I am waiting to see how Citibank will handle the matter.
I just received the Chase letter last night for a reduction of line from $200k down to $145k based upon “declining property values.” We only have $36k outstanding and have A+ credit, never late, etc. The current market value is about $700k (about $100k off peak according to zillow) even by Chase’s crooked calculation (guess or whatever).
This is just wrong and Chase as well as others should be held accountable for this.
Thankfully we had not started our big improvement yet.
Chase and others are pure criminals but really expose bankers for what and who they truely are.
Citibank has cut my HELOC by 50% without notice.What do you think will happen if theydecide to cut the line of credit and demand repayment?
See posting number 23 and contact them if this has happened to you.
If you are an ontime payer with good credit its time to fight!
My first mortgage erroneously reported my payment late. They immedately (10 days) corrrected the problem and submitted the correction to all 3 credit agencies, who then immediately corrected my credit report to reflect NO late payments on any accounts – ever. In the meantime, Citibank got ahold of the first false report and shut down the credit line, reporting the account as adverse. I have faxed them all the corrected information, mailed them, called them, gone to the branch and had THEM fax all the information, and all I get is form letters saying I have missed a mortgage payment. In my case, they can’t claim decline in loan-to-value ratio because it would be impossible to prove as I have 500K in equity in my home. SOoooo, they claim this is based on my “delinquent obligations” which there are NONE.
I am not going to roll over this easily. There are numerous consumer groups who provide the corect contact data for the state and federal regulatory agencies and remedies under federal law. Under the equity line contract they cannot suspend the line unless they REASONABLY believe there has been a MATERIAL change in my financial circumstances such that I cannot repay. Again, they did not claim a decline in value because they COULD NOT, so they looked for something else. They stated they have reviewed my account again, but my credit report clealy indicates they have not pulled my credit since May 8, when the first false report of a late was on there.
Has anyone acutally spoken with Terry Johnson?
I would like to know if anyone has actually gotten through to the underwriting department at Citibank to speak with a person. Thus far, all I get is customer service, who have no answers and tell me to put everything in writing and send it in. Then I get a form letter back with a terse, generic denial. Has anyone spoken to anyone with authority at Citbank?
Well I have now written 3 letters and talked to the people from the # the letters say I should. I shelled out the 600 they asked for my appraisal and here we are 3 months later still no heloc. I was told by “the phone person” to request my heloc be increased to my allowed maximum according to what my current equity would support and that I should be ok after that. Sure…. Citibank is now saying that due to my credit that my request has been declined.
I understand that according to my contract they can suspend or freeeze my aacount if they feel I can no longer pay for my loan, well my credit is exactly the same as it was last year (in the 700′s) when I got my loan “nothing” has changed. I dont know how else to put it to them specially since the main reason they say they froze my account was not due to credit but it was due to a decline in value.
They are completely ingonring the value from the appraisal ; my property has suffered a decline yes, but just as I was told by “the phone person” I was to say in my letter that the decline was not as severe as they had originally though. Well still got the same letter from Terry Johnson after saying wxactky what citibank told me to say.
I understand that Citibank has the right to review my credit periodically, which I am sure they have since I started sending letters however they do not have the right to freeze me because of credit. It seems to me that there is some sort of fradulent legal loop thay are using. I have read all of the fine print in my contract and I entered it the same way as I am now no conditios have changed I dont understand how they can do that.
I think it is a rip off what they are doing, sending borrowers to pay for appraisals that will not be taken into consideration. Basically having people waste money when they are creating new rules as they go. I honestly would love to know if anyone has succesfully restored their heloc.
It is very unfair I have done everything I was asked to do and more. Citibank is not keeping their end of the deal. They are bound by law to answer you when you write and I will keep on doing that. I bet that pretty soon they will say that my appraisal is too old and to pay for a new one and see where I am and then to say the same thing tome again over and over. It is a sickening loop.
I bet they have been told to deny everybody and to hope that we as consumers stop writting because we know we wont get anything out of them. The are probably betting that a bunch of us will just get discouraged and go away and give up the letter writting. It is just terrible what those thieves are doing.
I am going to get on the phone and stay on hold forever until terry johnson comes on the phone but I bet there is no terry johnson.
Well…. They did it to me too…with perfect credit. I had just finshed telling myUncle that I would send him a check immeditaely for $20,000.00 that he inherited from my Dad on a paid of property that I inherited. I decided not to borrow against the paid off property that I inherited because I could tap into home equity and I went wo write out the check to my uncle and the available balance said ZERO!!!” It makes me look like a fool that spent his money. Rather than say I don’t have it I am rushing around like a crazy person to collect the funds from other places and it is stressing me to the max! What really ticked me off is the EXTRA money that I have put on the account. Funny that Chase will not cash checks that have already been written but they did take my $2500.00 check that I threw on home equity (nowing I could write myself a check if I came up short….for a payment due of 667.00! I was so furious! I would think they would refund the overpayment..but NO!!! The letter they sent out was almost comical….
“Don’t worry Chase customers..your Automatic Payment set up will remain intact….” Geez that is a comfort!!! We will reimbuse you the 400.00 early closing fee IF YOU PAY YOUR ACCOUNT OFF IN FULL” well..that is mighty big of you! I feel instead of me having to prove to them that my house value if ok..they should show me documantation on MY HOUSe that it has dropped. Not just send out 322,000 letters in my zip code.
SHAME ON YOU CHASE!!! You should at lease send any moeny back in the last year that a customer has paid extra on their loan or give those of us that have paid ON TIME EVERY TIME a break!!!! YOU ARE PATHETIC!
I have a similar story! I am sure we all received the same form letters from
Terry Johnson. I too paid $600.00 for an appraisal only to confirm what I
already new, the value of my home was down only 6%. Still plenty of equity.
I sent this in only to recieve the “deragatory credit” excuse form letter from citibank. I have perfect credit so I ordered a Trans Union report as the appeal process stated. I further ordered one from Experian (perfect credit) No negatives and 35 accounts in good standing. I have not been late on anything in 25 years. I sent all this in. But I did not hear anything for a month. I finally called and they said they never recieved it. I copied everything again and sent it back in registered mail. 10 days later Citibank sends me a form letter stating that the equtiy in my home does not meet there current requirements. At the bottom of this letter there is a number to call if you have any questions. I called to see what there current requirements were but the supervisor said that the underwriting department will not tell them what the current requirements are. I am so frustrated with Citibank and not sure what to do. Oh and one more thing! When I spoke with the appraiser that came through my home, he stated that “off the record” Citibank was putting a lot of pressure on his company to keep the values low. I think I need to look up collusion in the dictionary. This has to be illegal!
Well good luck every one.
jaker1@usa.com
Well, I had kept my HELOC from Chase in the past two years almost drawn to the maximum, while invested it and was getting income on it in Europe – where I’m originally from – in Euros. I don’t need to tell you what happened to the EUR/USD exchange rate + interest rates in the past 2-3 years. It just seemed a no-brainer in my case with government guarantee icing on top of the Euro cake. I have ALWAYS paid all my bills including the HELOC on time and have a strong credit score, proven income of 100-130K. I just got 40k back and just could not resist the penny-pinching temptation to pay it temporarily towards the line to save on interest charged. WHAM! Got the letter in the mail within days about a freeze taking effect a date before(!) you even had a chance to read it. Good timing here at J.P.Morgan-Chase! I guess, they were watching and waiting in my account for such an event to hopefully take place. Now, some of my checks already issued will bounce, my credit going to take a hit and probably going to cost quite a few rapidly-depreciating dollars in BS bank charges. If I dispute, they might even have the nerve to tell me that “You know, you don’t seem to be such a good risk lately. You appear to be bouncing checks with several accounts of yours recently!” after them causing the situation in the first place.
I thought we had a contract!
It just further reinforces my inherent, European, suspicious-genes, “do not trust government or big business”. I let my guard down. Fooled me once, shame on you…
Carefully, look overseas for opportunities. This is not a really business-friendly climate now, not even tax-wise, given the fact that my “Old Country” now charges a top 19% flat income tax rate, virtually no exemptions, simplified book keeping etc.
Regards,
Winston
I just had to shovel out extra cash to ship all the windows back that were already delivered and we were about to have them installed. (Heating oil is not that cheap either and these single glazed windows should really go.)
Funny thing, I just dropped a check in the mail at the post office to the contractor 15-20 minutes before I got and read the “Burn Notice” from Chase. Thanks God, it’s a small community here and the Postal Lady knows me on a first name basis, because I had to drive down there in a mad dash and ask her to allow me to dive in the mailbox to retrieve my mail with the check in it from there. She was really nice and she did let me go through all that mail and retrieve the one I put in there. I’m quite sure she broke quite a few rules to do a favor for me but at least this is 5k less that is bouncing back unpaid. I’m still awaiting the final tally of bounced check fees and immediately raised interest rates and the like. The funny part will be if even chase will be trying to collect unpaid check fees on the HELOC that they have caused to bounce in the first place. In may case the HELOC suspended effective date of 7/8/08 letter got to my hands 7/10/08. REALLY sharp timing. Maybe, the post office and Postal Ladies did some favors for Chase too in timing these notices.
With that said, the supplier of these windows is out of a sale, the Contractor I hired is out of a job. Is that what they call “Trickle Down Economics” these days?
I have a gut feeling this one is not going to turn out pretty Folks. The feeling is based on the years of experience with inflation and its effects on the general population that I have witnessed while working for a couple of years in the countries of the former Easter Block. Thanks God, I was paid a Westerner’s wages in hard currency, so I had actually benefited there. But the locals, Boy! They were devastated. As I see it in this case, not even the Mighty US Dollar qualifies as hard currency anymore.
I work for one of the major nationwide banks that is temporarily suspending lines of credit and while I DO NOT agree with this process, unfortuately, it is completely legal. In fact, all lenders that offer a HELOC are required, by federal law, to include the clause in their contract that allows them to suspend or reduce a line of credit if the value of the collateral decreases. I can’t speak for all lenders, but my bank used an electronic evaluation (the same eval they would use if you called in to apply for a loan), and it is specific to each address. It uses county records along with comparable sales in the area to make a determination on the value. The problem with that is, in a market like this where there are more foreclosures than anyone would like to see (I just read 1 in every 250 homes in the country has been in some stage of foreclosure since Jan), these electronic evals don’t determine the difference… If your neighbor (or anyone in your area for that matter) forecloses, your value drops. My advice, as someone who is working with these accts.. talk to an appraiser, find out if the value really has decreased. If not, have the appraisal done and send it in for an appeal and then DEMAND TO BE REIMBURSED – especially if they reinstate the account. (My bank is able to reinstate about 95-97% of the accounts based on the appraisals that are sent in by the customers) The Fair Lending Law that allows lenders to do this is Regulation Z. It states the lender needs to send a letter w/in 3 days of the action on the acct. It also states that if the value has not decreased, the lender has no grounds to suspend the line – so talk to those appraisers! They will give you an estimate before they charge you. Remember though, this is not a reflection on your credit (if it is you should fight it) and banks are doing this to protect their assets, of course – what business doesn’t want to protect their assets, but it will, in the long run, help curb the out of control foreclosures across the county to help get us all out of this mess faster! Good luck to everyone!!
My law firm specializes in class action litigation. We are investigating potential claims against the banks that are breaching their HELOC agreements by claiming that a computer has determined that there has been a “substantial decrease” in the value of your property and thus freezing or reducing the amount of your HELOC. Often the bank’s claimed decrease is nowhere near the actual decrease in your property’s value, thus effectively breaching their contract with you. Nonetheless, the bank puts the onus on you to obtain and pay for an appraisal to prove them wrong.
Please contact me at the email below if you would like to discuss your particular matter further. Thank you.
Brian Rishwain
Rishwain & Associates, Inc.
439 N. Canon Drive #200
Beverly Hills, CA 90210
brishwain@jrllp.com
My HELOC was frozen by Chevy Chase Bank, Maryland for claims of reduction of property value. I am interested in speaking w/law firms specializing in class action litigation — investigating potential claims against the banks in Maryland.
Please contact me at this e-mail if you are interested: dsl83@hotmail.com
Just got my letter & citibank gave me the number of their appraiser….they will not allow any appraiser other than the company they have selected. It’s all very upsetting. This was my son’s college money & he only has one more year to go. If anyone has any real answers to this problem please let me know. It won’t be easy to get another loan. I don’t have alot of money & my credit is not perfect. It’s not horrible but now I have what I owe to citibank on my credit statement. UGH!
Citibank equity line of credit was cut to more than half the original amount. I understand that they are concerned about the rea estate market value falling; however, I have a problem. When I opened this line of credit, I was told that there will be a penalty of $2,000.00 if I close the account. I have an offer of a full line of credit from Bank of America, who evaluated my home, and considered my excellent credit.
Citibank will not release me without charging me the $2,000.00
Is this reasonable??? Is this fair???
I need help. Please write back to me with suggestions. [redacted]
Thank you!
Michael: We do not give legal advice on this blog. Please contact a consumer lawyer in your state. The lawyer database at the National Association of Consumer Advocates is a great place to start. http://naca.net
I received my letter saying that they were suspending my line. But, based on their “valuation” I should still have significant equity. When I called, they said that they lowered the LTV requirments from 80% to 60%. Basically, they don’t want to make any more loans.
BTW: They also said that there wouldn’t be a termination fee if I cancelled the line.
I received a letter from Citibank on September 1st, dated August 27th, stating that effective August 27th my HELOC decreased from $150K to $10K stating “We have determined that home values in your area, including your home value, have significantly declined. As a result of this decline, your home’s value no longer supports the credit limit for your home equity line of credit”. I live in a historic, highly valuable area where declines have been 5-10% over the past 2 years, so this reduction was unfounded.
On Sept 3, I formally requested the line to be restored, with much documentation…only to find out on Sept 25 (yep, letter from Terry Johnson) that the only consideration they will give is using an appraisal. Why don’t they tell you this in the first letter?
Like others, they force you to use Lending Services Inc (LSI) for the appraisal. $750 later (payment upfront), I get the appraisal back and I was speechless. It was a complete waste of time and money and the appraiser’s report was incomplete and inaccurate. The appraiser said, if I have any additional data I can send it to Citi and they MAY send it to him for reconsideration. Is this just a waste of time, because it sounds like they will reject it anyway and state that I now have a credit problem?
I am highly discouraged and this just doesn’t seem right. I agree, there may be some collusion with the appraisal company. Is anyone researching the LSI/Citbank connection
We are in the same situation as Michael, from October 4th. Our Citibank account has been suspended and, therefore, is useless as a revolving account (i.e. goes both up and down) which is why we have it and how we use it. We have another offer in hand from a local lender. We cannot act on it without paying Citibank over $3500 in Early Closure Fees. Citibank has refused to waive this penalty (yes, the infamous Terry Johnson letter). I had no confidence that an appraisal, at our cost, would remedy the situation and, after reading the posts here, my confidence in that is now effectively nil.
Here’s what we feel we have left as recourse. We are filing a complaint with the OCC, who regulates Citibank (go to helpwithmybank.gov and hit the “Start Here” button at the top). I contacted both our senators offices and our congressman’s office to see if they had any other ideas. Sen. Ben Cardin’s office suggested I fax a copy of the OCC documentation to him with a cover letter asking him to “contact the OCC on my behalf”. I’m am composing the letter and plan to send it to him as well as our other senator’s office and our congressman’s office.
That’s all I know to do besides alert the media. I suppose we’ll appeal, to Citibank, the decline of the fee waiver as well, but don’t have any hopes for that.
Please everyone, fax or mail your information to the OCC and to your Senators and Congress Men and Women. I don’t know if my one cry will be heard but hopefully many cries from all of us would. Either way, if I learn anything that might help all of you, I’ll try to remember to post back here.
I received the same crappy letter from Citibank.
The way I see this, is they don’t like the deal they made with all of us now that the interest on the HELOC’S are going down.It seems like it is a one way contract.
How do they know that the value of my home has decreased? Are they saying this is judical notice to the whole Country.They want to ride on the up side ,but not on the down side.There should be a law against what there doing to the American People. They hounded me to take out the second HELOC ,(Which I didn’t use)for over $100,000.00. In my opinion a Class-Action Should be filed in Federal Court.
There are laws of Right of Resission/Truth in Lending to protect us from these Crappy Lenders
Jim Askins
Just wanted to let you know I work for LSI. I hope all of you know that this is not LSIs fault. The home values in your area are declining. Well I should say for the majority of you. I know the cost of the appraisal is somewhat expensive, but if you want to even attempt to get your line back than get the appraisal. CITI is not a parent company of LSI. LSI only does appraisals, titles, and closings for all major banks in the U.S. The reason they tell you to use our company is because we cover nation wide and to avoid conflict of interest reasons. I understand this is a hard time for you, but life is fair, because its not fair for anyone. Think about it!
Bob ,If Your Company LSI is the only Appraisal company CITIBANK use.What conflit of interest is your company avoiding?
Unless you are concerned about all the poor people who have had their HELOC’s
Suspended with no regards to the actual value of their property ,your comments don’t make much sense. If CITIBANK fired LSI today with no notice. How much of a happy camper would LSI be. THINK ABOUT IT.
BANKATLANTIC….I think I might be forced to look into a lawsuit.. MY EQL was closed WITHOUT any notice at all and what I was doing is I had my checking account attached to my EQL account so every penny I make I simply transferred over to my EQL account and use that instead of keeping up with 2 accounts. I never thought in a million years they could just close it over night w/o any warning!! Now my 36,000 I’ve so far made this year THEY GOT WHEN THEY CLOSED MY AOOUNT.. I have zero money in any other account.. So at this point I couldn’t even afford a lawyer.. I’m a Realtor and it’s been tough enough in this market w/o this happening and in case you are wondering, I have an almost 800 credit score, I don’t have any huge credit card bills, maybe 3,000 and my car is almost paid off… My home has increased in value 26% since they gave me the EQL in 2006
I received the same suspension letter from CitiBank on a HELOC. Certainly a bank can change credit line limits based on a declining market. That is just business. But, I called Citi to discuss decreasing the limit to fall within a fair market for them. I learned it had less to do with a declining market than Cit’s change in its LTV parameters. I was told on the phone that previously, Citi was using 90% or higher LTV and now was using 65%. Because of the 65% LTV, my account was suspended. So, it seems, the HELOC is based more on their internal business and portfolio decisions than on the actual value of the property on which the line is supposedly based.
I have heard about this with many banks. I would be very interested in your individual situations and the language under your contract in which they are proceeding under. Contact me via email at brb@bockbattina.com or through my website, bockbattina.com. This is a serious issue that we are going to be looking into very hard.
Bryan Battina
Attorney
Bock & Battina, LLP
I contacted citi Bank today to discuss converting the balance of my HELOC.
I talked to some one named Charles.Charles said yes I could convert the blance of my HELOC,providing I qualify. He said our rate today is @ 4.25%, if we wanted to convert to a fixed rate we could @ 7.49 to 9.75% interest up to 30 years if we qualify. Isn’t this great after The American People just gave CITI BANK OVER
$10 Billion dollars todayto help them out. Where is the help for You and I.
The help We get is the SHAFT! The simple fact of the matter is they don’t like the contract they entered , because the existing HELOC,s are @ 4.25% interest today.
It has nothing to do with Our property values. If the interest on OUR HELOC,s were
at 9.25% interest today ,(It is My Opinion) none of Our HELOC,s would have been suspended.The borrower is the slave of the lender with all their GREED.
I received a telephone call from a Citi Bank Employee ,(she said her name was Lisa)
November 3,2008 @ approx. 6:00 PM.
The conversation went something like this. Lisa said she is from Citi Bank anwould like to speak to Me. When I got on the phone,Lisa asked me if I remember what my conversation was on Oct,30,2008 with the a person from Citi Bank ?
I said yes, and discussed with Lisa what is written above on October 30, 2008 with Charles. I further stated Citi Bank is not offering any thing that would want me to change to a fixed loan on Our HELOC. I told to go and check out the Inter-net and see how upset the borrowers are from Citi Bank.End of conversation.
There was other things discussed ,all pertaining to the same subject.
Lisa never did tell me why she called,(maybe I didn’t give her a chance to explain).
I spent 7 years as a loan officer, for a large bank, so I know a little something about this issue. In October, I got “the Letter.” In response to my written request to re-instate my HELOC:
-Nov. 11 – received letter from Citi (Terry Johnson) stating only acceptable appraisal is through LSI. Called LSI. Value up to $499,000 = $310. Value between $500,000 and 1 Million = $575. Per USPAP, isn’t is illegal to charge fees based solely on appraisal value?
-Nov. 20- Called Citi- They cannot send me AVM for my property to prove that value has dropped. Won’t accept my appraisal. Won’t pay for new appraisal. Spoke to a supervisor who said the same thing. She (Lilia Employee ID# A606092) also states that as long as the appraisal comes back supporting the original value, it would be automatically re-instated.
But looking at this blog, it sounds like this is not happening, so why waste $575?
I am very interested in hearing from attorneys involved in a class action lawsuit against Citibank for violation of the HELOC agreement. richloanman@hotmail.com
(see Oct. 30 comment, above).
After about a month, looking for another HELOC and receiving several offers, I got another letter for Citi, indicating that they had made an error, that the account was reinstated at the full, original limit, they apologized for the confusion and noted such was not indicative of their “customer services.” Regardless, ‘still feels like one is being jerked-around! I would never recommend Citi for any financial dealings!
I received my letter from Citibank on 11/25 (letter dated 11/19). That same day, before I checked the mail, I handed off the final check to my electrical contractor for the addition we just put on our house — a measly $2000. When I saw the letter, I immediately called Citibank to see about making sure that check gets honored. I was told that I could put in the request for them to honor the check and then call back every day to see if they decided to honor it. This was unbelievable to me. I was willing to accept their “suspension” of my HELOC, but I just wanted to make sure they didn’t bounce my last check and ruin my good name in my community. They were completely unwilling to even discuss it with me. I have nearly flawless credit, I’ve NEVER been late on a payment to ANYONE and I make more than double the minimum payment on my HELOC every month. How can they possibly just put me in this situation without any consideration whatsoever? I called back today (11/26) to see if they had approved my request and now they say that I can’t call to get the answer, but rather I’ll receive a letter in 5-7 business days and it’s likely that the check will be “returned” before they make a decision. So, they’re just telling me to expect the check to bounce and to stop calling and bothering them. With this many people put in such precarious financial situations, I can’t believe Citibank isn’t interested in helping out the good, solid credit risk customers. As for me, I can assure you that I will NEVER, EVER do business with Citibank again. If I could pay off my loan today and cancel the account I would. Instead, I will double my efforts to get it paid off and make sure that never see another cent of my good, hard-earned money. I, too, would love to be involved in any lawsuits that come from all this — and, I don’t even care about a financial payoff. I just want to see Citibank suffer. Of course, when they suffer, the go running to the Government tit for a “bailout.”
Just got a a similar letter from citibank suspending my HELOC without notice due to declining values in my area. Even after the 10-20% fall we’ve had in our county I still have equity over double the HELOC amount (and HELOC balance of zero) so their action is clearly not based on an assessment of my home but a regional assessment. The representative said they would not refund my annual fee and they still have a lein on my home in the amount of the full HELOC; effectively making it impossible for me to get an outside HELOC. I was told I could get an appraisal (at my expense) and submit an appeal but that “there is no guarantee you will get a response.”
Since I’m paying for the HELOC, shouldn’t the burden be on citibank to prove my home’s value has fallen?
Anyone know of a class-action suit in the making? Seems appropriate….
Had a similar letter, had started construction in my house…. who is going to pay for it.
Value of homes in my area are almost same (because of school disrtict, mission sanjose, fremont, CA) still they suspended the account.
There is no phone number to call to in this regard, the tel. no. which we can avail is only home equity line and they don’t have any replies, we can only do snail mail.
I have written to citibank on Nov 21st and never got back any reply.
The home equity deprtment says, we need to get a re-appraisal done and they say that the limit for equity line has declined from 80% to 65%, is that true….?????
These guys are riding on the bail out money and harrasing general public.
Any advice is much apprecaited
SO Now what do I do??, I’m 3 quarters from the completion of my addition, I’m down to last 10k & I get a suprise phone call from my contractor ” Your Check Bounced”, We were in shock when we found out they cut us off, last year my house was worth 300k now they tell me its worth 200k!!! I can’t belive what has happened, I’m distraught!!, I have a 4 year old & 1 on the way, I have no savings cause I used it to get construction started, I was gonna replenish the savings when the house was done, now what do i do? I have no roof on my house, its 20 deg out here in ny, Christmas a week & a half away, I’ve never been broke, I relied Citi bank & I should not have, How can Citibank hurt so many people, Our credit rating is Great & we are never late on payments, NOW WHAT DO I DO??? Unfinished home, No savings, I can’t believe it!!, They send a letter a week after the fact not even before…… Craig.. Carmel Ny
I just got my letter from CITIBANK after arranging for solar paneling to be installed on my home. My house according to there estimate is worth 390k and I owe 98K. They told me to do an appraisal to prove my value was higher and I told them just use their value and unsuspend my line. I don’t even care if they drop it to 100k. I have an 800 credit score and currently a 0 balance on my line. I mailed them their request as they requested 2 weeks ago, and so far they will not confirm reciept. I used to broker loans to them, but based on this, we should just let them go BK.
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