AmTrust Offers Homeowner $50 To Voluntarily Close HELOC
Here's a new tactic we haven't seen before: mortgage originator AmTrust called blogger BeThisWay and offered her $50 to voluntarily close her home equity line of credit (HELOC), possibly in response to the recent class action lawsuit against them for illegally closing HELOCs. She writes, "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, hoping they don't cancel it?"
"AmTrust says, "We love you! Really!"" [JustShootMeNow]
(Photo: Caitlinator)
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Last month they offered me $1500 cash and to refund all pay-off processing fees for paying off my second mortgage that I have with them. I figured they were just trying to clear up their books a little.
I'd see how high they were willing to go.
AmTrust sent an email to customers (including me) that held CDs with them and offered them no penalty if they wanted to withdraw their money and close their account early. I thought it was a phishing scam and messaged Amtrust about it, but it was legit. Considering they were ASKING people to close accounts with them, I figured they weren't in the best shape and to get my money out just in case. I know all about FDIC protection, etc etc, but I wasn't sure if they were allowed to retroactively lower interest rates if they didn't have the funds to keep it up. Cost me a little in electronic transfer fees (thanks BoA) but it gave me peace of mind.
@Crabby Cakes: Before the Chase merger, WaMu closed my HELOC, without warning. Our home hasn't lost much value, so they didn't claim it was an equity issue. They simply said "after a review of your current credit status..." My FICO is in bad shape because I closed a bunch of cards after the companies threatened to double my interest rates unless I opted out (which meant closing the accounts), so I closed the damn accounts, and just let my FICO take the hit. Oh well.
National City offered us $200 to close our inactive HELOC a few months ago. We didn't take them up on the offer because we plan to use it in the next year or two. We're hoping they don't close it when it hits our next anniversary in May.
E*Trade offered us $200 to close ours, and we went ahead with it. No plans to use it anytime soon.
I'm the OP.
Um, for $1500 I'd do it in a heartbeat.
They're only offering me a lousy $50.
Our credit union hasn't approached us about closing our HELOC yet. They're in great fiscal shape.
What $50? My $250k Washington Mutual HELOC was halved 3 months ago. A week ago it was completely frozen by Chase with no warning whatsoever. Mind you, my condo has no mortgage. I own it outright!!! It seems, according to Chase in about three months my condo lost 100% of it's value and now it is worthless. Nice...
I have a 30 year HELOC with Wachovia Securities and the first five year "draw period" expires tomorrow. I've heard nothing from them whether or not they plan to renew the draw period for another five years, and they have not responded to two letters I've sent them asking if they will, including one that was sent registered/return receipt. All their mailroom did was to put a big rubber stamp address on the signature card and the USPS sent it back to me like that. No person's name, nothing.
Ironically, the contact address given on their monthly statements for things like this is their "Central Customer Assistance Team". Assistance indeed.
Can anyone suggest the next step I should take? Any government banking agency I can complain to about their ignoring my inquiries? My suspicion is that my HELOC was bought and sold enough times since I got it, that Wachovia no longer has any paperwork that tells them anything about my particular circumstances, including a 5 year draw period with option to renew.
last fall, I got a phone call from AmTrust as I was walking back from the mailbox. "Ignore the letter! Your HELOC is still open, you shouldn't have gotten that!"
In my hands was a cancellation notice I'd not even opened yet.
Amtrust would occasionally make mistakes (not sending out bill payments, putting holds on direct deposits...) but they ALWAYS were very forthright and did everything to fix them promptly, including paying any late fees, with just a phone call.
My AmTrust branch was just bought by WesBanco, and the transition literature we were sent made it clear it was time to change banks. Expensive fee structures and condescending tones were not hidden by shiny print pieces of happy people prancing in the grass.
AmTrust is still servicing my mortgage, but I'll have nothing to do with WesBanco.
Thanks for citing our MortgageLoan.com AmTrust article.
Homeowners/consumers are really having to battle it out in this market--to keep their homes, their sources of credit, and figure out the best options considering current mortgage rates and government assistance programs.
Banks are getting really creative on how to reduce their "risks" and exposure to "toxic assets"--Hey, those are really consumers underneath! I think this was a poor "marketing" choice.
On the credit card front, reductions and account closures like this by your credit card company can actually impact your credit score--bad stuff in a tight credit market.
Great articles Chris!
My parents just had their Chase HELOC closed without explanation or warning. (The letter was received on March 20th, but they closed the HELOC on March 13th.) No one reappraised the house and it certainly has not lost half its value. Now, Chase is offering to refinance it with $900 in closing costs! I'm going to forward the article about the CAL to my dad, I don't know if he's aware of the Truth in Lending Act. Thanks for the info, Chris!