We are reviewing our HELOCs to ensure continued sound credit history and sufficient equity --- overall, to make certain the customer still meets the terms of the account.

When we terminate or change [reduce credit limit] the HELOC based on a new evaluation done internally by the bank, we must advise the customer of our action. I feel a Statement of Termination or Change can be used and we state their credit limit has been reduced or terminated based on a new determined appraised value of their home. AND.... they must also receive a Notice of the Right to Copy of Appraisal. If they want one, we must send them the Bank's evaluation or whatever we used to determine their home's new appraised value. Is this correct ?

We are just starting this process and I want to make certain everyone understands that the customer has a right to the 'evaluation' that the loan officers might complete.

Thanks for your review and response.

You may want to review this recently released document. Whether you are FDIC or not it has good information.

http://www.fdic.gov/news/news/financial/2008/fil08058.pdf


I do not believe the appraisal notice would be required in this situation. The appraisal is not being obtained in connection with an application for credit. However, if the borrower should contest your decision I think it would be wise to share the information.

Thank you so very much --- it is exactly the information I need. I have added to my "Favorites" so I will be able to review these Financial Institutions Letters....

"When we terminate or change [reduce credit limit] the HELOC based on a new evaluation done internally by the bank, we must advise the customer of our action."

You cannot "terminate" a plan based on the decline of property values.