by Calculated Risk on 1/31/2008 07:18:00 PM

From Kathy Kristof and Scott Reckard at the LA Times: Trying to tap into home equity? We'll see

Countrywide Financial Corp. sent letters to 122,000 customers last week telling them they could no longer borrow against their credit lines because the total debt on the home exceeded the market value of the property. ... The move by Countrywide ... is part of a pullback by lenders nationwide on home equity loans ... with new evidence of sinking home values, many lenders are requiring that homeowners maintain a much larger percentage of equity in their homes as a cushion against financial problems.

... Chase Home Lending ... will start imposing new guidelines Monday that further restrict who will be granted a home equity line ... This week, California homeowners can tap as much as 90% of the equity in their homes. Starting Monday, however, Chase won't let homeowners in certain parts of the state -- including Los Angeles, Orange and Imperial counties -- borrow more than 70% of the value of their homes.

This is an excellent followup to my posts this morning: Advance Q4 MEW Estimate and Lenders Suspending HELOCs