Keeping liquid in a home equity freeze

Washington Mutual has "had programs in place for years that increase, decrease, block and suspend credit lines based on an number of factors, including a customer's entire relationship with WaMu, their payment status, changes to their credit standing and changes in the value of their property," says spokeswoman Sara Gaugl.

Wells Fargo "conducts periodic reviews of home equity lines of credit to help make sure that the limit on the line of credit is in line with the borrower's continuing ability to repay the loan as agreed," said spokesman Jay Lawrence in a written statement to Bankrate. "Recently we have increased the frequency of these case-by-case reviews due to market conditions, and we have seen an increase in the number of borrowers affected."

Options for frozen credit lines

For starters, borrowers can always contact lenders and appeal if their HELOC has been frozen.

At Chase, for example, clients "can appeal if they feel their appraisal isn't accurate or they have a pressing need for that money," Kelly says. Chase will consider each appeal on a "case-by-case basis."

In its statement, Countrywide invited the thousands of clients who've had their credit lines frozen to call their representatives at (800) 669-6607, "if they believe that there has not been a significant decline in the value of their home."

No matter who their lender may be, individuals who believe they have the equity to back their credit lines will have to prove it. That means they need to obtain current appraisals.

The cost is fairly modest: roughly $200 or so, but the report "can't come from anyone," warns HSH's Gumbinger.

"Banks will only accept trusted opinions, so ask your lender for a list of approved appraisers," he adds.

Another option is to go to a different lender for a HELOC. The fact that an existing credit line was frozen should not affect someone's ability to borrow elsewhere, says Gumbinger. What matters is how much property borrowers own outright.

"Equity trumps everything," he says.

Modest expectations also help. Borrowers who seek a credit line up to 100 percent value of their homes don't stand a chance of getting it in today's tight market. But if they apply for up to 80 percent of their home value, and they've got sufficient equity, they've got an excellent chance of getting it, says Gumbinger.

Homeowners who can't convince their lender to reconsider a freezing a credit line -- or who simply can't secure a HELOC from anybody -- will have to try new strategies to free up extra cash.