Zero Notice Account Freezes
SAN JOSE, CALIFORNIA -- I would like to lodge a consumer complaint about the holder of my primary mortgage and my Home Equity Line of Credit (HELOC): Countrywide Financial. My account number is 178347903.
I have held a Home Equity Line of Credit, with a credit limit of $37,000, with Countrywide for one year. In that time, I have borrowed a total of $4,000 from the account, to cover wedding expenses. The loan balance has since been paid off with no late payments or other adverse activity.
With the intention of purchasing a larger home in 2009, I planned to rely on my HELOC as partial down payment for a contract with Toll Brothers builders. Prior to signing a contract with Toll Brothers, I contacted Countrywide Financial to ensure that my HELOC was still active, with a credit limit of $37,000. The answer from a Countrywide customer representative was that my credit limit was still being honored.
Countrywide Bank, in a department called Home Equity Loan Servicing (SV3225 â P.O. Box 10287, Van Nuys, CA 91410-0287) received a check request from me on July 3rd for the amount of $34,998. Countrywide refused to honor this check, and instead froze my HELOC account that day from any further withdrawals. Their response is included here in its entirety:
Important Message about Your Loan
We are writing to let you know that recently a payment on a check against your home equity line of credit had to be denied.
What This Means
Check number 00604 in the amount of $34,998 was denied on July 03, 2008 because:
Your account no longer permits draws to be taken.
What You Need to Do
Please update your records accordingly.
What is important to note about this chain of events is that my account and credit limit were in good standing until the very second I attempted to utilize the line of credit, at which point the account was âreviewedâ and frozen.
This is at best an ad-hoc and anti-consumer method of account review, and at worst a very obvious attempt to prevent the company from bleeding cash at the expense of customers in good standing.
While this activity is undoubtedly legal according to the terms and conditions of the HELOC (no doubt some clause allows them to freeze accounts at any time), I find it to be highly consumer unfriendly. At the very least, I feel cheated out of the $500+ in processing fees I paid for a now unusable HELOC.
The damage this has done to me is to put me in breach of contract with Toll Brothers, to whom I promised a 5% down payment on a new property in order for them to move forward and promise new construction. I believe I had reasonable expectation, and took sufficient precaution, to ensure that I was able to complete the terms of the contract I signed at that time (28 June, 2008) based on my HELOC. I will note that my HELOC account was in good standing on 28 June.
On the phone, Countrywide indicated that my account could be unfrozen only through a reappraisal of my property at my own expense, or through some signed affidavit of property exchange values by a licensed real estate agent.
I have other sources of potential funding for my new home contract, but I would like to submit this as further evidence of California State Attorney Generalâs contention of Countrywideâs consumer unfriendly practices and policies.
Thank you for your time and consideration.