Chase will no longer accept HELOC requests
Just a few days after that lending standards raised require that almost all purchase mortgage borrowers have at least 20% less and have a FICO of 700, JPMorgan Chase “Temporarily Paused” its home equity line of credit.
As of April 16, Chase will no longer accept new HELOC requests. Customers with existing HELOCs will still be able to draw on these lines of credit, but the bank will not accept applications for new HELOCs.
In a statement sent to HousingWire, Amy Bonitatibus, Chase Home Lending’s chief marketing officer, said the bank is making the change because of “uncertainty” in the market.
“Due to the economic uncertainty, we are temporarily pausing new applications for home equity credit lines,” said Bonitatibus. “Customers can continue to tap into their home equity by cash-out refinancing their existing mortgage.”
As Bonitatibus said, the bank will continue to allow customers to withdraw equity from their homes through a cash-out refinance that will use the equity of the borrower’s mortgage.
A HELOC, on the other hand, is typically a second lien.
According to Chase, cash-out refis are becoming increasingly popular with his customers. In the past year, for example, the bank carried out twice as many cash-out refis as HELOCs.
Chase had already postponed some of its HELOC employees to manage regular mortgages during the refinancing boom early last month before the country closes.
The bank will not accept any new HELOC applications in the future either. How long this break will last remains to be seen.