AmTrust Canceling my HELOC. Goodbye, safety net!

A few months ago I wrote a post about AmTrust Bank trying to bribe me to close my Home Equity Line of  Credit (HELOC).  They only offered $50, and I passed.

But I worried that they’d cancel the HELOC anyway, and I was right to worry.

Yesterday I got a call from Mary at AmTrust, telling me that they would indeed be canceling the HELOC.  She again offered me the $50, as I “may as well take the money since you’re going to lose it anyway, ” because AmTrust is “getting out of the HELOC business.”    I was unhappy to hear this news, and told her I’d call her back.

I discussed it with Husband, and  even he really doesn’t see why I’m unhappy about losing the line of credit.  It’s not that we need the money.  My balance is zero, and has been since about 6 months after I opened it (I took it out to pay off my car loan so I could deduct the interest, then paid it off quickly anyway).

And we have a healthy savings.  Very healthy.  And a few other investments that could easily be turned back into cash with little lag time in the event of an emergency.  And we pay $25 a year for the privilege of not using it.

But I like knowing it’s there. I like it an awful lot.  It’s a $10,000 safety net.  Just in case.

So, instead of just being a proverbial  sheep, I  called Mary back today and asked for documentation that they had a right to do this.  After all, it was my understanding that this was a 15 year mortgage, which would give me 7 more years.  I want to see, in writing, the situations in which they are able to pull the plug.

I also want to know what happens if I take the money, and perhaps put it into another investment which would give greater returns than the interest I pay.  Would they call the loan?  Would they let me keep it until it’s paid off?

I must be the only person who has balked at all, because Mary was surprised by my request.  She then told me that if I’d like,  the bank next store would be happy to take my application for a new HELOC.

Not the  point, Mary.  I already have a HELOC.  And I’d like to keep it, thankyouverymuch.  I certainly don’t want to apply for any new credit, and I don’t want to pay any additional fees.

Mary didn’t know the answers, but promised to get them for me.

But, honestly, chances are slim to none that I’ll get to keep it.  So I’ll likely take the $50 buyoff.

And I’ll try to look on the bright side.

I’ll be saving $175 in yearly fees.  Add that to the $5o buyoff  and that’s a very real $225 more in my pocket.  So, if I do have an emergency, lets pray it’s an easily doable $225 hummingbird variety and not a $10,000 poop-my-pants Bigfoot.

AmTrust says, “We love you! Really! But will you please cancel your HELOC? We’ll give you fifty dolla!”

I just got a really weird phone call.  But first a little background…

AmTrust Bank is one of the banks with which we do business.  It’s the bank where I purchased my mortgage, and a week later took out a $10,000 Home Equity Line of Credit to pay off my car loan.   The HELOC is actually a second mortgage of sorts.  I don’t recall right now if it was a ten or fifteen year agreement, but I do recall that they gave me a $100 Home Depot gift card for opening it, and they charge me a $25 fee to keep it, with no penalty if I close it as long as I keep it open for at least three years.

I took out the HELOC so I could deduct the interest, and made the car payment to my HELOC instead of a bank until I paid it off six  months later.  I’ve not used it since, but that $10,000 is available if I need it.

I may not use that credit line, but I like knowing it’s there if I need it.  Despite having a five-figure emergency fund, one never knows when one will have a really big emergency, does one?  That’s why we decided it was worth $2 a month to keep it open.

Since the most recent financial crisis began I’ve been reading and hearing stories about some of the things banks are doing to reduce their exposure to debt – good and bad.  Credit card interest rates are being hiked while credit limits are being slashed.  HELOCs are being canceled and/or closed, whether people are carrying a balance or not.

I’d hear things like that and wonder if any of the companies with which I do business would take these actions.  I’ve not really worried about it since we pay our balances off every month, and we don’t need the credit to survive.  We have excellent credit, so I understand that if a company makes one of these decisions that affects me that it isn’t about me at all – it’s about them.  I have my financial house in order – they’re scurrying to do the same.

So today I get a phone call from said bank, asking me if I’d yet received the letter about my HELOC.  No, I had not.  But already I’m thinking that they’re closing it, and calling to lessen the blow.  I’m already composing my reply in my head when what she is staying starts filtering through.  I heard a few phrases – “we’ll pay you $50” and “if you want to” and “no penalty” and “just stop by to fill out the paperwork“.

Whoa.  “Let me get this  straight,” I say.  “AmTrust is willing to pay me $50 if I close my HELOC?”

Yes, and there’s no penalty.”   Well, there’d be no penalty anyway, chica.  But I held my tongue.

“But I don’t have to if  I don’t wanna?”

No.  You may keep it open if you wish.

Uh huh.

I end the conversation and hang up, thinking that AmTrust really, really, really wants to close the HELOCs but really, really, really doesn’t want to piss off their customers.

Huh.

Well, I’d like to keep my HELOC.  But I have to figure out AmTrust’s next move.  What will they do if not enough people voluntarily surrender their  HELOCs?  Are cancellations next?

Am I better off taking the $50 now, or waiting, hopeing they don’t cancel it?  Waiting and getting nothing.

I’m feeling the love!

4/9/09 9:52 pm Edited to add:

I just ran across this article which describes a classs action lawsuit against AmTrust accusing them of illegally suspending these types of accounts.  No wonder they are looking for a kinder, gentler way of getting rid of that risk!

Sometimes The Best Move Is No Move At All

I’ve forever been talking about selling our home here and moving to a cooler climate, with better schools and where we can afford the kind of house we’d like.   I’ve been longing to move for years, especially  after I got pregnant.

I want Son to grow up in a place where there’s a change of seasons.  I think the seasons give a nice framework to mark the passing of time, and they add color to my own memories.

I want Son to grow up in a place where he has a yard to play in, where there are lots of other children, where we can take off on a weekend trip to the mountains.  I want him to pick pumpkins straight from a real pumpkin patch,  not a parking lot.  I want him to sled down a hill and run with glee in his shorts on the first warm day after a long and cold winter.

We’ve been so close to going so many times.  The MLS listing is written, the photos are taken.  I’ve spent many a night browsing listings looking for the perfect new house for us.

My readers and friends must be sick of the subject, as am I.  I’m tired of talking about it – I just want to DO IT.

But, like so many others, we’ve been hit by the lousy economy.  Husband got a pay cut last week,  and our home is worth only 60 percent of what it was worth three years  ago.  The  job market in Atlanta is so flooded that the odds of getting a job even for local applicants is a longshot, and if I were a hiring manager I’d toss any out-of-town applicants directly into the circular file.  We just can’t risk it, at least until things turn around.

The good news is that you’ll not have to hear me talk about it, at least for this year.  The bad news is that we’ve decided that our best move is no move at all.

It’s not about risk-taking.  It’s about not making a bad decisions because we don’t want to let go of our dream.

On the other hand,  Husband still has a job.  We’re living in a home we could afford even if Husband had to work at McDonald’s.  We have no debt other than the mortgage.  We have a healthy savings account.  We have lots of family and friends here, and it’s been a nice, chilly-for-Florida winter.

So, I’ll make our too-small house work.  I’ll find a school for Son.  I’ll continue to scavenge clearance racks to find things to re-sell.  I’ll continue my de-cluttering battle, and hopefully gain some ground. We’ll go to the beach.

I’ll count my blessings that we still have a home, that Husband is still working, that we can put food on the table. I’ll pray for those who aren’t as lucky.

But I’ve not really let go of the dream.  We’re just delayed.  I can live with that.

I’m going to make the most of today.  But I’m still going to think about that house.

To List the House or Not List the House, That is the Question

We were sooooooooo close.

We were so close to listing the house.

We’d decided against a realtor and for a listing service, which would give us a realtor-quality listing that would stay up until we sold the house.

We’d started packing and put items in storage to make the rooms feel bigger.

We’d taken the photos of clean and de-cluttered rooms.

We’d snuck onto realtor.com looking at houses in Georgia.

We’ve even come up with a list of Twenty Things to Do Before We Buy a House.

We were one day away from listing the house when the floor – a.k.a. the economy, fell out from under us.

Banks aren’t lending money. Credit card companies are reducing credit limits, affecting credit scores for even those with excellent credit histories.

Car dealerships are closing because no one is spending money to buy cars, and banks won’t give car loans to those few who do.

Now we’re unsure what to do. If we find someone willing to buy our house they probably won’t be able to get a loan, at least until banks start lending money again.

And if we do sell the house Husband has to find a job in Georgia before we buy a new place. After all, no lender is going to give us a mortgage with no income. And in this economy advertising agencies are laying people off, not doing much in the way of hiring…

On the other hand, no one’s going to even want to buy our house if they don’t know it’s for sale. I’m also thinking that sitting on the market for awhile will not have the same stigma it has had in the past. Almost all houses are languishing, aren’t they?

So, what’s the smart decision? Do we list the house and take those risks? Do we put it on the market even though no one is buying and we’re uncertain about the future of everything?

Or do we wait, for our home value to decrease more, staying in a place we don’t want to be, and wait for things to get better while we sit here uncertain about the future of everything?

Stay tuned.

Husband Had a Date With Another Woman, And I’m Worried

But not about the date.

Tonight Husband had a date. Her name is J, and she was just laid off from the company where Husband works. She’s a nice girl, and Husband is very concerned about her (going through a divorce with two young kids) and the company he works for.

Husband’s company has laid off about a third of its workforce in the past eight months. That would be surprising, but not when we’re in the middle of a real estate slowdown of epic proportions and you happen to be an advertising agency whose specialty is real estate. Management is swimming upstream in floaties trying to secure new, more diverse accounts, and throwing off baggage left and right, including baggage they need to keep afloat.

So, I’m worried about the viability of this company.

I’m worried because Husband makes 25% more working for this agency, who is well aware of his special qualifications, than he would be for a new company not used to paying his current salary to someone in his position.

I’m worried because Husband has Diabetes and Son has asthma and we’ll be paying thousands a month in COBRA until he gets past his probation period with any new company.

I’m worried because we want to move but can’t sell our house.

I’m worried that he’ll get a job in another state and we’ll be separated until the house sells.

I’m worried that he’ll have to take a job at too-low pay doing something that will leave him unfulfilled and frustrated.

I’m worried he won’t find a job at all.

I’m worried that I’ll have to go back to work.

I’m worried about depleting our very comforting and healthy savings balance.

What I’m not worried about is Husband spending time with another woman.

What I know is that we’ll make the best of whatever comes our way, even as I’m worrying.

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