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#1256497 - 09/24/09 06:33 PM Reinstatement of Credit Privileges
LJones Offline
100 Club
LJones
Joined: Apr 2006
Posts: 156
Customers are requesting reinstatement of credit privileges on HELOCs frozen due to a decline in colleral value. Staff Interpretations, Comment 4 on 226.5b(f)(3)(vi) states:

"Once the consumer requests reinstatement, the credit must promptly investigate to determine whether the condition allowing the freeze continues to exist."

Does anyone have an objection to "removing" this condition by reducing the credit limit, so that the new LTV meets loan policy/product requirements, and therefore the line can be unfrozen? We'd offer this to the customer as a possible solution, and do a change in terms if they accept.

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#1256640 - 09/24/09 07:44 PM Re: Reinstatement of Credit Privileges LJones
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
You can change the terms on a HELOC if done in writing. I don't see it as a problem, as long as this is offered to anyone that asks.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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