HELOC UNDER PRESSURE.

More proof that getting a HELOC will be harder, below is an announcement from a major lender received yesterday.

"As noted in last Friday's rate sheet email, Lender XYZ will be discontinuing stated income loans of any kind in the Home Equity Division effective Monday, November 12Th. Max CLTV will also be reduced to 90%. All new submissions beginning Monday November 12Th will be required to go full doc.
Lite Doc is still available for FICOs over 700 to $350,000 max loan amount. However, you are still documenting the income via pages 1 & 2 of 1040's or most recent pay stub and an '06 W-2 if they receive bonus/commission/incentive income of any kind.
First time home buyers do not qualify for Lite Doc option. Lite Doc option is listed on page 3 of the rate sheet. Underwriting will condition accordingly based on your borrower's employment. You do not have to request "Lite Doc". It is automatic based on FICO score."

Just a few weeks ago, I told you that HELOC may become something of the past due to a combination of guidelines tightening and loss of equity caused by declining home values. This announcement confirms my prediction. It is to be noted that most lenders have either adopted similar measures or are about to do so.
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