Jul 2 2008 10:34AM | Permalink | Email this | Comments (3) |
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More homeowners are having trouble making payments on their home equity credit lines, according to the latest report today from the American Bankers Association.

That's bad news for remodelers, because it could mean even more tightening of HELOCs and other home equity products that many homeowners use to pay for home improvement projects. We're already seeing a lot of banks freeze HELOCs as they look to protect themselves from defaulting loans. The worst part about what's going on -- and sure to be frustrating for many clients and remodelers -- is that most banks are just making widespread decisions about homes in a given market, irregardless of the situation of the individual homeowner. In other words, you could have a client with good credit, income, etc., who can't get the financing they thought they had.

(Interestingly, this practice may violate Truth-in-Lending regulations. The FDIC sent out letters this week warning banks of this.)

If you haven't already done so, it's probably time to figure out ways you can help your clients get the financing they need to complete projects. Whether it's partnering with a lender who understands the remodeling business, or taking the plunge and self-financing like Custom Design & Construction, one of our 2008 Innovators, remodelers that can offer creative solutions are going to be better poised to make it through this downturn.