Stories of our credit crisis.
So, I'm wondering if any of you out there have experienced this recently, or know people who have.
I know at least 1/2 dozen people who, over the last 3 months have had their HELOCs wiped out. They were never late, just now instead of a HELOC with a large available balance, they now just have a home equily loan, with no available credit.
Same thing with credit cards. I know a number of people who had credit cards with large available balances have those completely wiped out in the last 3 months, even though they have always been current.
In fact, my boss had his American Express Platinum card with no limit be reduced to a $1500 limit on it. This is an account that he's had for 15 years with never one late payment.
So if banks aren't lending to each other, and banks are taking away credit card balances, will this also mean that banks will stop approving mortgages almost completely?
Thoughts.
I know at least 1/2 dozen people who, over the last 3 months have had their HELOCs wiped out. They were never late, just now instead of a HELOC with a large available balance, they now just have a home equily loan, with no available credit.
Same thing with credit cards. I know a number of people who had credit cards with large available balances have those completely wiped out in the last 3 months, even though they have always been current.
In fact, my boss had his American Express Platinum card with no limit be reduced to a $1500 limit on it. This is an account that he's had for 15 years with never one late payment.
So if banks aren't lending to each other, and banks are taking away credit card balances, will this also mean that banks will stop approving mortgages almost completely?
Thoughts.
Comments
Haven't heard of any CC limits being dropped. Although mine have ludicrous limits so even if they were halved it would have no effect.
Amex Business credit ratings per business are based on tax returns which every business signs to allow Amex to receive every year directly from IRS. So they rate every business card holder on income, DnB scores, and a multitude of other options. I know a number of businesses whose activity has dropped thus their limits on Centurions and other prime business cards have dropped like a rock. Some went from $200k down to $50k. Even though they have no balance, as they pay off the whole card every month.
HELOC reductions will once again occur when the banks who have computerized appraisals re-evaluate the value , thus reducing their exposure, if need be.
Makes me wonder if HELOCs will essentially vanish like unicorns. These loans are usually the last recourse, and total owner equity is at an all time low. Sure, you could provide a HELOC to grandpa and grandma who are all paid off, but too many other people have close to nil equity in a declining market.