Feds freeze HELOCs at IndyMac

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A news item from Tom Petruno’s Money & Co. blog: The new government management at IndyMac has frozen all home-equity lines of credit, as well as lines of credit to commercial contractors.

From Money & Co.: ‘Customers with home-equity credit lines will have their accounts frozen and ‘reviewed on a case-by-case basis,’ according to the FDIC. That’s a move by the agency to make sure its losses on the bank’s loan portfolio don’t balloon from the FDIC’s current estimates.’

More: ‘Lines of credit to commercial construction contractors also will be frozen pending a review, but construction loans made to individual consumers won’t be affected.’

Analysis from master of the obvious: The many readers who have complained here about similar HELOC freezes by other lenders will find the government’s action disappointing. It’s a pretty clear government endorsement of the practice of freezing HELOCs. The readers on the other side of the argument, who have applauded banks for freezing HELOCs, will wonder: Why hadn’t IndyMac’s previous management already frozen these lines of credit?

Your thoughts? Comments? E-mail story tips peter.viles@latimes.com.

Photo credit: L.A. Land