Legal Question in Real Estate Law in California

Re: Heloc

Most lender agreements contain provisions that permit the lender to alter the credit terms if the borrower's credit standing changes. For instance, if the borrower's FICO drops below a certain level, he or she is late with one or more payments to them or any other lender, files bankruptcy, etc.

Re: Heloc

A party cannot unilaterally alter the terms of a contract without committing a breach. However, 95% of consumer credit lines, and almost as high a percentage of business and corporate credit lines, have provisions in the contract the borrower signs giving the lender authority to reduce, or close, the credit facility. Sometimes, the lender (or credit provider) must have a reason, such as the borrower's credit was downgraded. Other contracts allow the line to be reduced or closed without specifying a reason. Also, the prior notice provisions vary. I have seen deals where the credit provider didn't have to give notice; it just started declining attempts to draw on the line by balance transfer or cash-advance check.