Answers about Home Equity Lines of Credit and Home Equity Loans

The bank told me that I could no longer get advances from my Home Equity Line of Credit (HELOC) because the value of my home declined. The notice I received from the bank stated that I could appeal the decision by obtaining an updated appraisal. The bank indicated that I would have to pay for that appraisal. Can the bank require me to pay for the appraisal?

Yes. Federal law permits lenders to collect bona fide and reasonable appraisal fees (and credit report fees if applicable) if such fees are actually incurred during a review of whether the condition triggering the reduction or suspension of the HELOC continues to exist. Please keep in mind that an updated appraisal may not lead to a favorable decision.