Many buyers of Mt. Hood properties in Welches, Government Camp and Rhododendron use HELOCS to obtain downpayments and purchases of second homes and investment properties. With a pinching off of HELOC funds, this could impact sales in our area.

Do you have a home equity line of credit? Well, be sure and check if you think you do because many banks are pulling these and notifying owners after the fact. Some homeowners are writing checks on these equity lines and finding their checks have bounced even before the notification.

Housing prices are adjusting downward all over the nation. Home Equity Lines of Credit are based on home valuations. Depending upon what state you live in, the amount of your total home debt can be 65% or 75% of your home value. The "home value" is determined by a computer model the banks use.

If you read the small print of your agreement the banks have a right to pull this at any time the home value reaches a certain amount and they can immediately freeze your ability to use this line of credit.

Turmoil in the banking industry will cause even further tightening of credit for Helocs over the next 24 months as they sort out the sub-prime mess and capital issues.  Just be aware that this instrument to gain funds may not be there for a while!