Chase froze my HELOC! It has been thirty days. How long do they have to make a decision?

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fuego568

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I have an 800+ credit score, 80% equity, and unchanged income.  I have more than enough equity to justify the line ( even with the most gloomy appraisal).  Chase originally sent a request for a 4506 form.  I filled it out and mailed it to the address given.  Chase sent a second letter claiming they never got my form, and my HELOC is frozen.  So, I faxed the 4506 form from one of their branches.  They continued to claim they never received my form.  So, I filed a complaint with the OCC.  Amazingly, they found my form! 
So, my question is how long do they have to drag their feet on this?  30 days, 45 days, 60 days, 90 ... forever??
If anyone has experience or knowledge of this issue I would appreciate some help.
Thanks.
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April 24 - Chicago
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fuego568

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I believe there is a class action suit for HELOC customers who have been frozen based on value.  The mass appraisal technique Chase has been using is flawed and produces an unfairly low number.  My recommendation is to find the class and join it.   Also, be sure to file a complaint with the Office of the Comptroller of the Currency.  (You have to sling as many stones as you can if you hope to beat Goliath)
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October 02
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kalieberman

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Me too - they just froze my HELOC line one day with little notice - based on their pereception of house value.  I was up to date and then some with payments and actively using the line - I am still pissed off.  I don't want to pay for an appraisal to get it reopened but it makes no sense -- even if my house value went down to the levels they claim, I still have the equity available.

I too have a great rate - it must be their way to get me to refinance for a higher rate.  Any suggestions?
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October 02
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Jason Wroble, "Mortgagejaw.com"

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Unfortunately I do believe it is the choice of the banks to freeze lines of credit or keep them open. I would suggest asking for a manager and keep going up the ladder or say you will go to a major news source. The only other option I could think of is switch banks.

Thanks for the question!
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October 01
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John Paunan, "John Paunan"

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That is good to hear.  I had my heloc closed as well, but it was based on loss of value.  My only options there was to pay for an appraisal to dispute it, which would have been wasted money.  Nevertheless, I think the approach that many of the lenders have taken with regard to lines of credit is nonsensical.  Sure they may have covered themselves in terms of equity exposure, but they've alienated some of the most qualified borrowers and strongest consumers.  

I've told many of the people I come into contact with to keep a mental note of those companies that have helped consumers through this difficult time, and those that have taken government assistance without providing the needed assistance to consumers.  It's great that Chase's balance sheet is in the black, but it's strengthened its position on the backs of consumers.  We all understand that the primary purpose of corporations is to drive wealth for shareholders, but in this financial crisis, one which requires such a heavy investment by tax-payers, we should expect more and better from our financial institutions.  And don't tell me Chase is exempt from the bailout; from accepting TARP and the treasury financed acquisition of Bear Stearns, Chase has been bailed out.  There's my rant for the day!
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May 20
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sunnyview

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I am so glad that you posted! I am really glad to hear that it worked out in the end. I have never trusted Chase and feel that they play fast and loose with the law. You deserve a gold star for stating up and saying NO. I hope you will consider reposting your success in the ownership forum so other people can get information about how to deal with this. Even a cut and [aste about what you can do to fight a frozen HELOC would really help people. I think your Freedom of Information request is a great idea. Congrats on your fight and I hope that the complaint grows legs. Chase needs a kick in the hiney for the way the treated you.
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May 20
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fuego568

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It turns out you can demand your HELOC be reopened.  I read the entire terms of my HELOC agreement, and they had seven clauses they could exercise to freeze me out.  I had proof the clause they were using was based on the lie that I did not comply with their information request.  I filed a freedom of information request with the IRS that proved Chase had my forms long before they insisted I never sent them.  Their behavior is beyond unethical.  I filed a complaint with the Office of the Comptroller of the Currency, the FDIC, and contacted their external auditor. 
I now have my full HELOC restored at my original rate of prime minus 1.5% (2.75%) , they can't drop you just because they don't like your rate.  If you're a David out there fighting these Goliaths - Don't EVER, EVER, EVER give up!  Fight them with every ounce of energy you have. They don't fight fair, so make sure to hit them everywhere you can.
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May 20
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Rudi Hofmann, "CA UMB"

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568,

I don't think you can demand your Heloc to be reopened. Many lenders are freezing or closing the Helocs on their books. You'll need to read the entire terms of you Heloc Note/Agreement to ascertain your rights. ... Good luck, Rudi
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April 29
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fuego568

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I could really use some help here.  As an update to the story, I filed a freedom of information request with the IRS.  It turns out Chase bank submitted a 4506 transcript request on March 30th, 2009.  This proves Chase was lying to me about never receiving my original form by mail, since I faxed my second copy to them on April1st.  Since they are claiming my non-compliance with their request for the 4506 form is the reason my HELOC is frozen, can I now demand the HELOC be reopened?  Because I have proof they had my original 4506 form.  My only crime here is having a great rate on my HELOC!
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April 29
 

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