Answers about Home Equity Lines of Credit and Home Equity Loans

My Home Equity Line of Credit (HELOC) was reduced or frozen. What can I do to have the credit line reinstated? What can I do to appeal the decision?

Federal law provides two options. The first is, the lender can require you to request reinstatement of your original credit line when the circumstances permitting the reduction or freeze have changed, so long as it informs you how to request such reinstatement. If your bank notified you of the process for requesting reinstatement of your credit line, you should follow that process. If you are uncertain about the information your bank requires, you should contact the bank. However, be prepared for the bank's requirement for an updated appraisal at your cost.

The second option is the lender can monitor the HELOC on an ongoing basis to determine whether the circumstances permitting the reduction or suspension continue to exist. If the bank is monitoring the HELOC, you do not have to request reinstatement of the original credit line.