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Can a bank merge a HELOC and home equity loan?

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My Boys!!!!

Member since 6/06

14437 total posts


Can a bank merge a HELOC and home equity loan?

My parents had a line of credit AND a home equity loan with WAMU. After WAMU turned into Chase, they merged the two accounts w/out their knowledge. My mom noticed on her last statement that the balance was higher than usual on her loan. She has spoken to several different people at the bank and has gotten nowhere.

A line of credit is like a credit card and has an adjustable rate. A home equity loan has a set interest rate for a set period of time. I told her there is no way they can or should be able to do that and she needs to continue to fight it.

Posted 10/2/09 9:43 AM
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Member since 6/05

9878 total posts


Re: Can a bank merge a HELOC and home equity loan?

No they can't do that. As you said, one is fixed rate, one is adjustible rate. Additionally, just because WAMU serviced the loan didn't mean they owned it. Those loans very likely have two different "owners" (typically securitizations) who are entitled to the separate cashflows of those loans. Sorry if that was long winded!

Posted 10/2/09 10:28 AM

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