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Tips to deal with frozen or cutback HELOCs

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WASHINGTON (8/7/09)--The Federal Reserve has released a guide to help homeowners deal with home equity lines of credit (HELOCs) that have been frozen or reduced because of the economy. Its "5 Tips for Dealing with a Home Equity Line Freeze or Reduction" explains consumers' rights and lenders' responsibilities when credit lines are reduced. It also provides information for those seeking to have a credit line reinstated. The tips explain that lenders can lawfully reduce or limit a consumer's line of credit regardless of whether the consumer has made timely payments. However, the lender must send a written notice of the action no later than three business days after the action goes into effect. The notice must include information about any other changes to the HELOC. The notice should include specific reasons for the modification ot the HELOC's terms. The most common reasons are a decline the home's value or a change in the borrower's financial circumstances. Understanding why the amount is frozen may help you take steps toward reinstating the original amount. For example: the lender may not be aware of significant home improvements that increase the home's value. If financial circumstances have worsened, look for ways to rebuild the credit rating. Protect your credit history by acting responsibly and contacting the lender immediately if you have questions about a freeze or reduction. Lenders must reinstate the credit privileges when conditions that caused the freeze or reduction no longer exist. The five tips include:
* Read the notice your lender sends you. * Call your lender. * Learn why your lender froze or reduced your HELOC. * Ask your lender how to have your HELOC reinstated. * Remember that your lender can impose fees for reinstating the HELOC.
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How new credit card law affects young adults

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WASHINGTON (8/7/09)--Cardholders can expect sweeping changes soon from new credit card legislation, but if you’re a young adult, pay special attention. Sunday’s H&FF Radio show line-up includes a credit card expert who explains why young adults need to understand how the new law affects them. Home & Family Finance airs Sundays at 3 p.m. EDT on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network. The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA’s websites. Sunday’s show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:
* “What Young Adults Must Know About the New Credit Card Law,” with Dr. Mary Beth Pinto, marketing professor and credit card researcher, Sam and Irene Black School of Business, Penn State Erie, The Berhend College, Erie, Pa.; * “Sustenance and Hope for Caregivers of Elderly Parents,” with Gloria Barsamian, retired social worker, Burlington, Mass.; * “Cash for Clunkers,” with Ellen Martin, public affairs specialist, National Highway Traffic Safety Administration, U.S. Department of Transportation, Washington, D.C.; and * Your Questions Answered.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Western Corporate FCU, also known as WesCorp, and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve our country worldwide. For more information, read “Students Face Credit Card Debt” in Money Mix.