HELOC Suspended Without Cause?
Last Updated on June 26, 2017
Attorneys working with ClassAction.org are no longer investigating this matter. The information here is for reference only. A list of open investigations and lawsuits can be viewed here.
At A Glance
- This Alert Affects
- Individuals with a home equity line of credit (HELOC) or commercial line of credit.
- It has been alleged that banks are decreasing, freezing or terminating these loans, violating its contracts and clients' rights in doing so.
- Lenders offering home equity lines of credit (HELOC) and commercial lines of credit
- Additional Details
- For a creditor to lawfully suspend a customer's line of credit, there must be a material change in the borrower's financial situation and the creditor must reasonably believe that the borrower will not be able to repay the loan as agreed.
If you have a home equity loan or commercial line of credit, and the bank changed the terms of your loan or suspended your line of credit, you may have legal recourse to seek financial compensation. Allegedly, certain banks and mortgage companies have been unilaterally changing the terms of their home equity loans and commercial lines of credit without reasonable basis for doing so.
Violations of the Truth in Lending Act
It has been alleged that certain banking institutions have been violating the Truth in Lending Act and other statutory and common laws when they alter the terms of their home equity loans and commercial lines of credit. Allegedly, the banks are improperly claiming that the borrower had a “materially adverse change in financial situation” and/or demanding that the borrower provide proof of their financial situation or else the Home Equity Line of Credit will be revoked. In many cases, even upon presentation of the requested documentation, the banks and mortgage companies may have suspended or revoked the credit lines improperly. It is believed that these actions are being taken in an attempt to enhance the banks’ financial condition and appear “healthier” to federal regulators.
Banks Under Investigation
SunTrust and JPMorgan Chase have already been hit with lawsuits alleging that the banks unlawfully froze the accounts of unsuspecting borrowers. While the following banks have not been involved in legal action surrounding their home equity loans of commercial lines of credit, it is believed that other lenders may be engaging in practices similar to those alleged in the suits against SunTrust and JPMorgan Chase. We are currently investigating to determine if any of these following establishments have been unfairly changing or suspending their customer’s lines of credit:
- Bank of America
- Wells Fargo
- Citizens Bank
- U.S. Bank
- Regions Financial
- Fifth Third Bank
- TD Bank
- KeyCorp (Key Bank)
- BMO Financial
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