SunTrust HELOC Accounts: Now you see it, now you don’t?

September 11th, 2009. By Kristine B

Do you believe in magic? Seems maybe you should if you were one of the folks who allegedly saw their SunTrust HELOC account do a disappearing act for no apparent reason. It’s kinda like that bewildered feeling you have after sitting through some dazzling Vegas magic act—asking, how’d they do that?

Guess it’s gotten to be a bit commonplace to ask “how’d they do that?” when you’re talking about banks. Given the recent troubles faced by numerous financial firms over the past year or so, it should be no surprise that many clients are filing lawsuits against their financial firms, alleging, among other things, mismanagement of accounts. 

However, when lawsuits arise alleging that banks are singling out vulnerable individuals and freezing, decreasing or altogether terminating their lines of credit, you have to wonder what’s going on. And your “how’d they do that?” starts to become “why’d they do that?”

Take the SunTrust Bank situation. SunTrust is accused of taking drastic action against senior citizens—people who relied on the money available to them via their Home Equity Line of Credit (HELOC) accounts—by freezing, decreasing or terminating the account without any apparent justification. 

Case in point (no pun intended): a recent lawsuit was filed against SunTrust Bank by an 82-year-old woman, who says she filled out some paperwork that SunTrust sent her without realizing that the information she provided would be used to rationalize changes to her account. Furthermore, the woman had never missed a payment, was never in arrears and was never informed that she had violated the terms of her agreement, if indeed she actually had. 

The bottom line is that the woman had a SunTrust HELOC account (a line of credit of up to a maximum amount of money with the collateral being the borrower’s equity in her home) and thought she could count on that money being available to her when she needed it. That is, after all, the basis for making proper, timely payments: to ensure that the bank has no reason to terminate the line of credit. Imagine making regular payments, on time and in the amount owed, only to be told that, despite that, the money left on the line of credit is no longer available to you. 

Now, imagine being in your 80s and finding out that money you thought was available to you was no longer there. Imagine the stress that would come with learning that your line of credit, with up to $400,000 supposedly still available to you in case of emergency, had been decreased so that there was no longer anything available to you. The money that you might have been counting on to get you through these tough times is gone—without any real justification. 

People who held SunTrust HELOC accounts paid their balances on time and for the agreed-upon amount, according to the lawsuit. They knew that if they didn’t, the line of credit could be taken away. But, they say, they had no idea that it could be taken away even if they lived up to their end of the agreement. Abracadabra, huh?

So, do you believe in magic?

Tags: SunTrust

This was posted on Friday, September 11th, 2009 at 9:49 am and is filed under Emerging Issues . Feel free to respond, or trackback. Read our comments policy.