Keeping liquid when home equity is frozen
Nina Smith was among those who obtained, but never tapped, her HELOC. Instead, Smith — who owns properties in Nevada and California — thought having an open line of credit for a home she uses as a rental investment in Phoenix would be a smart way to access cash in case of some big emergency.
“Obviously, I have plenty of savings and investments, but I like to have someplace where I have cash that’s liquid. It’s my backup to my backup,” says Smith.
Not anymore. In February, Smith was among 122,000 borrowers who got letters from Countrywide Lending informing her that she couldn’t use her credit line after all.
When Smith wrote about the experience on Queercents.com, the financial Web site she founded for gays and lesbians, the response was immediate. More than 20 homeowners responded with similar stories, with many telling her they’d been relying on their HELOCs to get by.