HELOC Freeze Puts Squeeze On Family's College Tuition Plans

In Algonquin, Illinois, the Chicago Sun Times reports:

• Jim and Cindy Ranallo are determined to give their two sons one thing they don't have: a four-year college degree. But the home equity line of credit they were relying on to get both boys through school was unexpectedly frozen by JPMorgan Chase weeks before their elder son's recent tuition payment was due.

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• The Ranallos' situation is a familiar one for hundreds of thousands of Americans who have found their home equity credit lines frozen or reduced this year. Their struggle to send their children to college also is familiar to parents patching funds together for higher education, constantly worried they will come up short.

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• Hysterical after opening the bank's letter, Cindy Ranallo feared her son would be kicked out of school because they couldn't afford it. A [college] official reassured the Ranallos that they would find a way for their son to stay, offering additional student loans, which the family accepted.

For more, see Frozen home equity loan hurts family (ECONOMY'S VICTIMS: Freezing of home equity loan threatens to kill Algonquin family's dream of sending sons to college).

The U.S. Office of Thrift Supervision recently issued a six-page letter of guidance which generally explains what obligations lenders have in connection with the freezing of home-equity lines of credit [HELOCs].

Go here for other posts on Frozen HELOCs.