Under what circumstances can a lender freeze or reduce a HELOC credit line?
Correct Answer
B) When the property value declines significantly below the original appraised value
Under Regulation Z Section 226.5b, lenders may freeze or reduce a HELOC credit line under specific circumstances, including when the value of the dwelling securing the plan declines significantly below its original appraised value, among other conditions such as material change in financial circumstances.
Why This Is the Correct Answer
Under Regulation Z Section 226.5b, lenders may freeze or reduce a HELOC credit line under specific circumstances, including when the value of the dwelling securing the plan declines significantly below its original appraised value, among other conditions such as material change in financial circumstances.
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