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Valued Contributor
GregB
Posts: 1,670
Registered: ‎05-24-2007

BofA cancelled HELOC

I recently finished a long divorce. I kept the house and my ex-wife signed off the house, which is now being recorded in my name only. She stays on the Mortgage and the HELOC since there is no new loan. I just received a notice from BofA (formerly Countrywide) saying that I could not charge against my HELOC and that it could only be reopened with an application procedure showing that the "problems" have been solved.

 

It identified "1) There has been a material change in your financial circumstances and 2) Obligations currently past due. It named TU as the CRA.

 

I don't have any past due obligations. There are zero negatives on my reports from all CRAs. TU doesn't even show even an inquiry. I suppose my ex could have some new negative info since she refuses to get a job. The divorce has not recorded yet. The deed recorded after the date of the notice. I assume neither affected this notice.

.

It does not say anything about calling the loan, just that I can't charge against it. I'm concerned about it showing as closed or that the limit changes to $0 with $30,000 owed. I've tried calling BofA and they just transfer me to a loan officer who wants to refi both loans with my name only.

Senior Contributor
O6
Posts: 3,626
Registered: ‎10-13-2009

Re: BofA cancelled HELOC


GregB wrote:

I recently finished a long divorce. I kept the house and my ex-wife signed off the house, which is now being recorded in my name only. She stays on the Mortgage and the HELOC since there is no new loan. I just received a notice from BofA (formerly Countrywide) saying that I could not charge against my HELOC and that it could only be reopened with an application procedure showing that the "problems" have been solved.

 

It identified "1) There has been a material change in your financial circumstances and 2) Obligations currently past due. It named TU as the CRA.

 

I don't have any past due obligations. There are zero negatives on my reports from all CRAs. TU doesn't even show even an inquiry. I suppose my ex could have some new negative info since she refuses to get a job. The divorce has not recorded yet. The deed recorded after the date of the notice. I assume neither affected this notice.

.

It does not say anything about calling the loan, just that I can't charge against it. I'm concerned about it showing as closed or that the limit changes to $0 with $30,000 owed. I've tried calling BofA and they just transfer me to a loan officer who wants to refi both loans with my name only.


I do not understand why you would even hesitate in removing your wife from the HELOC.  If she is a co-applicant with you, the bank can use changes in either your credit picture or in hers.  Also leaving her on the HELOC leaves open a possibility that she can obtain funds that you will be legally required to pay back.  In the case of a domestic issue such as divorce I think the bank would be prudent to limit access to previously joint credit. 

 

The only issue I see, though, is who is responsible for the $30k now owing.  How was that debt handled in the divorce decree?

IAALBNYL
Valued Contributor
GregB
Posts: 1,670
Registered: ‎05-24-2007

Re: BofA cancelled HELOC

According to BofA, the HELOC is tied to the Mortgage. This is the typical vague verbal info that you get from a lender CSR. They were both done at the same time and with the same Lender, Countrywide.

 

Part of the HELOC balance is community, the rest was charged to her when she maxed it out when she filed for divorce. This was all considered on the Marital Balance Sheet, when I kept the house and the 2 loans against it. With no available funds, she couldn't draw on the HELOC. The two mortgages are the only remaining accounts in both our names. They were handled in the divorce judgement along with all other assets, named and unnamed.

 

I originally assumed that I would ask Countrywide (now BofA) for a new HELOC for about $100,000 to pay off the original HELOC plus credit cards and other debts that she ran up. This HELOC would be in my name only. Obviously I can't have any HELOC with available funds that includes her name.

 

I assume a HELOC that has been cancelled will look bad to BofA if/when I go to get another.

 

BofA did send me one bill recently for a late item. In February, 2010 they sent me a bill for the $75 yearly fee from 4 years earlier. I called and they claimed that it was due and faxed me "proof". I had all my paperwork, faxed them the proof that it was paid ontime, and it was corrected. I wonder if this "late" item could have started their inquiries into our financial health.

 

 

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Epic Contributor
haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007

Re: BofA cancelled HELOC

[ Edited ]

 


GregB wrote:

 

...I assume a HELOC that has been cancelled will look bad to BofA if/when I go to get another.

 


 

I would think that a mortgage (including HELOC) lender wouldn't blink at the sight of one being closed and another being applied for. Divorce is a very common reason for doing so. I'd recommend visiting a Real Live Human Being in a local BofA branch, explaining that you need to get your ex off the HELOC, and that you'd like to close it and open another in your name only.

 

If they turn you down, I would think that it would be for a completely different reason. This is just a guess, though.

 

DXH and I also have a former-Countrywide mortgage, now held by BofA. We never could figure out how we wound up with CW, because we applied with someone else, but right before closing, we got shopped. :smileymad: His ID was part of those stolen by the former CW employees, American Express considers it a black mark to have a CW mortgage; all around, lots of fun. I'll be perfectly happy when he re-fi's and buys me out (he's keeping the house) to permanently sever ties to these fine folks. :smileytongue:

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