AndrewM’s Musings

A quick review of my current financial situation:  Same job, higher income, a perfect payment record, and a better FICO score (800+) than when the loan was originally approved.

From the guidelines issued by the Office Of Thrift Supervision (OTS):

TERMINATING, REDUCING, OR SUSPENDING A HELOC: LEGAL RISKS
Truth in Lending Act (TILA) / Regulation Z
[...]
With some exceptions, Regulation Z prohibits a creditor from changing any term of a HELOC account. Notably, however, a creditor may prohibit additional extensions of credit or reduce the credit limit during certain periods, as long as any reduction in a borrower’s credit limit below the outstanding balance does not require the borrower to make a higher payment. Consistent with Regulation Z, creditors may freeze or reduce a HELOC account when:
[...]
The creditor reasonably believes that the consumer will be unable to make payments as agreed because of a material change in the consumer’s financial circumstances. It is important to recognize that this exception requires both a material change in a borrower’s financial situation and the creditor’s reasonable belief that the borrower will not be able to repay the HELOC account as agreed.

So why has Chase/Wamu frozen this line of credit? Since my income is higher than when I obtained this HELOC, and my documented income is higher than that which I declared on this Stated Income / Verified Asset Loan (SI/VA) loan, it can’t be because “your income is significantly less than the income information provided when you applied for your credit line”.

Could it be that Chase/Wamu’s decision “was based on whole or in part on information obtained in a report from the consumer reporting agency [TransUnion].”? Let me take a look at my FICO score conveniently reported by the Chase/Wamu Website by TransUnion.

Wow – my credit score is excellent and unchanged – from their own website! It appears that Chase/Wamu has no actual evidence to support the Regulation Z’s requirement of a “material change in a borrower’s financial situation”.

Could it be that they just made this all up to close an under-used line of credit? Looks like I’ll also be filing a Regulation Z violation complaint with the FDIC.

I noticed this morning that my Chase/Wamu HELOC has been frozen without notification.

I contacted customer service representative "Braden" (877-750-6825) for an explanation. I was told that the line of credit is "frozen" during this review period. I asked for confirmation in writing; he said he was "unable" to provide confirmation in writing – only verbally.

I find it at best unprofessional, at worst deceptive, that this "freeze" was never mentioned during my numerous calls to customer service, nor in any of the letters requesting additional information.

Unfortunately, this will cause me to scramble to fix any problems associated with their sudden change of commitment. I will try to post additional information when I can.

One of the Comptroller of the Currency (OCC) requirements is that I first attempt to resolve the issue with the lender. Since I was not able to solve this with additional calls to customer service, I asked for the contact information of their loan compliance officer (or department). The customer service represent instructed me to send my complaint to "Consumer Lending Support" at the same address as my previous correspondence.

I also confirmed with two separate calls to 877-750-6825 ("Ryan" and "Carl") that there is no suspension on the line of credit, the paystub and 4506-T forms had been received and were "being reviewed by underwriting, and will have a response in 30 days."

I sent the following letter on May 20th via USPS Express Mail with Delivery Confirmation:

Subject:  Flawed, Inappropriate, and Onerous Demand
Attention: Consumer Lending Support

[...
The contents of my previous post, Flawed, Inappropriate, and Onerous Chase/Wamu 4506-T Demand?
...]

Remedies that I require from Chase/Wamu Consumer Lending Support:

1. Provide text with page and line number references from the original Terms and Conditions of this stated income, verified asset loan (SI/VA) that expressly permits Chase/Wamu to require new information not originally provided as part of this loan. If this documentation is required as part of "updated" information, provide evidence of the original paystub and tax documentation to be "updated".
2. If Chase/Wamu cannot provide the above information, confirm in writing that both hard copy and any electronic copies of the documents have been destroyed.
3. For all future requests, provide sixty (60) days notice with a thirty (30) day follow-up letter.
4. Carefully review any future requests to prevent obvious errors like the ones referenced in this complaint.
5. Refrain from backdating any future requests.

Please reply to this complaint in writing within fourteen 14 days of the date of this letter. Failure to respond satisfactorily within fourteen (14) days from the date of this letter will result in a filing with the Office of the Comptroller of the Currency (OCC).

I will keep you all posted regarding their response.

Testimony of Al Schweitzer four years ago as offering the simple recipe for obtaining this kind of information. Schweitzer, who described himself as a former pretexter, said he used various "gags" to get the data he needed, and always followed a simple five-step formula:

"Identify the piece of information you are after; identify who or what institution is the custodian of the information sought; based on real world situations or actual operational procedures of the target institution, figure out under what circumstances and to whom the desired information would be released; be that person under those circumstances."

http://redtape.msnbc.com/2007/12/thanks-to-last.html#posts

Anyone interested?

…’cause only suckas build webs:

http://www.youtube.com/watch?v=sHzdsFiBbFc

Here’s the real experiment pics…

http://www.trinity.edu/jdunn/spiderdrugs.htm