Wachovia Cutting Home Equity Lines of Credit
Wachovia Online Banking announced today that is cutting home equity lines of credit for certain of its customers. This cut is not being made to all of Wachovia bank’s customers, but only a small portion.
Kathy Harrison of Wachovia stated that about 3 percent of Wachovia’s home equity lines of credit customers were seeing their home equity lines decreased. Some of the Wachovia online banking customers were having their credit lines suspend and others were just having their available credit lines reduced.
Wachovia Bank has stated that the purpose of this home equity lines reduction is due to falling home prices. As homeowners’ homes decrease in price the equity in the home is reduced. This reduction in home equity has increased the risk of these loans for Wachovia.