Can my HELOC bank cancel my home equity line of credit?

Yes…and they are doing it all over the country, especially in “high risk” parts of the country like Florida and Southern California. You simply get a letter in the mail, saying your home equity line of credit has been “frozen” if you have a balance or cancelled if you don’t. Either way, you no longer have access to the “old” available credit line.

Then banks rationale for doing this is the declining values in your area don’t support extending additional credit on home equity that is dwindling. The bank doesn’t want you to go “underwater” on the home and subsequently must remove your excess encumbrance.