Both of my brother-in-laws got loan modifications and knowing that I had excellent credit and they did not I was upset that they both now had better interst rates then me. I am at 4.5% and they are both now below that. Out of curiosity I called my bank, Wells fargo, to see if I might be eligible for a loan modification even though my wife and I both have jobs and have always made our payments on time and were expecting to continue to make our payments on time. I thought i had nothing to lose by calling Wells. A couple of weeks after calling Wells fargo to inquire about a loan modification I then received four letters from Chase all stating that my credit limits on my four Chase credit cards where being slashed. One credit card 's credit limit was slashed from $30,000 to $1000. another card went from $17,500 to $1,000. I was left with the belief that my inquiry to Wells Fargo about a loan modification had resulted in my credit with Chase being drastically cut. My other two credit cards with Chase where slashed down to their present balances. Any thoughts?
Credit slashed
By mrcharlesecurry Follow Sun, 25 Mar 2012, 6:15am 7,451 views 86 comments
In Miami FL 33183
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Hermosa Beach, CA
I had a similar slash a few years ago. Perhaps your experience explains it. I restructured my loan in 2008. I called my bank, told them I was going to refi and could they do anything for me. They offered the restructure. Took my mortgage from 30 year to 15 and lowered the rate by a couple points. A little later, I changed a credit card from a corporate card (my own, single person corporation, on my SSN) to a personal card. They didn't tell me about it at the time.. but they cut my credit from 30-something to 6k. Even though I'd had the 30k for 10 years and on the personal card before I'd changed it to a corporate card. I ended up closing the account completely.
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Miami, FL
If they obtained information illegally from Wells they did the wrong thing. Further, I did not need a loan modification. I wanted a loan modification. If I have excellent credit then I should be rewarded with a loan modification as well. They took away the credit that I had earned. That was not the right thing.
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Just goggled, and found this:
http://library.hsh.com/articles/loan-modifications-help/hamp-hurting-borrower-credit-ratings.html
It says just the application for a mortgage mod is noted by the Credit Agencies and shared with Creditors.
Looks like your credit card companies are practicing "Defensive Lending".
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Miami, FL
Is there such a thing that you speak of? I checked my credit score and saw no such thing.
I was calling not because I needed a loan modification but because I felt like I deserved one.
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Menlo Park, CA
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lurking says
Actually it might have happened that Wells ran your credit report because of your phone call, and that Chase saw that inquiry listed on your credit report:
http://www.ehow.com/info_7946179_do-inquiries-affect-credit-report.html
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Half Moon Bay, CA
What's the big deal? Open a cc acount somewhere else and close the Chase cc account. It doesn't matter how long you were a customer, the Bank could care less if you leave.
My mother had a bank account with Wells Fargo for over 30 years. She started getting charges on her cc that weren't hers and Wells wouldn't do enough to help her. When she closed her accounts, they didn't ask why, didn't try to make her stay: nothing.
Open an account with your local credit union. They will appreciate your business 100x more than a big bank.
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Saint George, UT
elliemae's website
mrcharlesecurry says
Awwwwwwwww, how sweet that you're so deserving.
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Miami, FL
The Miami Herald reported that there was a settlement between the banks and the States and that one should call their lender to see if they qualified under the settlement for some sort of benefit so I called and as a result of my inquiry to my lender, Wells, about some sort of benefit that I may be elgible for such as a loan modification it appears to me that my credit line at another Bank,Chase, on my credit cards was cut by close to $50,000. I did not need a loan modification but I felt I deserved one for having excellent credit and due to the banks wrongful actions.
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Miami, FL
I do not recall giving them permission to pull my credit. Do they need permission to pill credit?
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Miami, FL
Yea, wise guy, if you play by the rules your whole life I think you are very deserving.
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Saint George, UT
elliemae's website
mrcharlesecurry says
I'm glad you think I'm wise. That makes me feel warm & squishy inside. But you think you're deserving because??? You didn't buy during the bubble, you have a low interest rate and you can afford your payments.
mrcharlesecurry says
No - agencies & companies pull your credit all the time without your knowlege or permission.
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San Mateo, CA
mrcharlesecurry says
mrcharlesecurry says
736 is not a particularly high score. At 45, if you had perfect credit record you would have a much higher number (closer to 800). I suspect that "some small late payments" have dinged your score.
Someone with 736 score would not normally be able to get $30,000 credit limit cards.
Chase has rules in their contracts that say if you are ever late at all they will change your terms.
But, it's possible calling Wells had an effect if they pulled up your credit report. There is a "reason" associated with each credit report request. Maybe they have a code for "deadbeat requested a loan modification". ;)
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Miami, FL
I have a guy living across from me who just arrived to this country a few years ago. Some one in foreclosure quit claimed a single family home on a lake to him and now he is living several months for free and it might turn into years that he lives there for free. I have lived in this country my whole life playing properly by the rules. I am not living free like this other guy or the many others like him. So yes wise guy I think people who have always played by the rules are also deserving of some help. Plus I wasn't part of the gang that took loans they could not afford. I was always behaving coservatively and properly and now people like you ridicule people like me for doing a good job and you mock me for asserting that people like me are also deserving.
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Miami, FL
I have a low interest rate because my credit was excellent. I earned it but people I know who have bad credit now have lower interest rates then mine because they got loan modifications. I thought it was the people with excellent credit the got the lowest interest rates.
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Miami, FL
The only thing is I am not a deadbeat as I pay All MY BILLS!
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Miami, FL
I do not think of you as being too wise.
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Miami, FL
The big deal is that I had established credit that appears to me to have been taken away illegally.
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San Mateo, CA
Didn't mean you are a dead-beat, but loan modifications are an attempt to break contract.
Of course you are upset. Loan modifications and other help that is being given to people who can't/won't pay their mortgage is a moral hazard. It makes honest people who keep paying their mortgage wonder what is the point when they could get a free ride if they stopped paying their mortgage.
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mrcharlesecurry says
It happens. My credit is pristine with zero debt,still BOA slashed my cc limit from 33K to 17K in 2008 - they were scared the hell out of the financial fall out at the time. Too many bad apples spoils the few good ones in the basket.
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Miami, FL
I just checked my credit report and it said there were three hard credit inquries but I do not recall giving anyone permission to pull my credit. I need to find out who made the three hard credit inquiries.
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mrcharlesecurry says
You may be a victim of ID theft - act fast before they ruin your credit - I hope that is not the case.
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Miami, FL
BofA might be different. They were hurting much more than Chase and that was 2008 and this is 2012.
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Are you underwater?
If yes, then it explains everything.
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mrcharlesecurry says
Things have got lot worst in 2012 then 2008,if that is what you mean,it is correct.
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Oh jeez why do you want a credit card with such a high limit? That's not what credit cards are for.
Every year I have to call the credit card company and tell them to reduce my credit limit, then like clockwork they raise it again the next year.
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Miami, FL
I am not sure if I am underwater as one does not know what they can sell their house for until they try but what is your point?
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Miami, FL
I thought things where much worse in 2008. How are things worse now?
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Miami, FL
I would rather have the $50,000 credit line that I had then the $2000 that they have now given me. I do not understand your logic.
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mrcharlesecurry says
Nor do so many other people I know.
For my logic, I would not use a credit card for 50K or even 17K of debt, so in that case the high limit will not do me any good, but could do me harm or at least a lot of hassles if my credit card account was fraudulently tapped.
Moreover, supposing that I wanted to borrow for a car or something like that, when they look at my "credit report", they'd see that I already have so much available credit to other creditors, probably would not get the most competitive offer.
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mrcharlesecurry says
One reason why things are not worse now, maybe even you could say that things are better now, is that creditors are not so much as they used to, ginning up borrowers with ever more credit than they can responsibility afford to repay.
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Miami, FL
What if your child needed a $50,000 operation that was not covered by insurance. Would the $50,000 line of credit then be important?
Fraud is covered by the cc company.
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Miami, FL
I have established credit over 45 years.
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I understand, you want the credit card as a "secondary" health insurance account.
You didn't understand my logic, you and so many others including some I am related to, that for my logic, if the credit card is the first place to go for emergency funds, then it means we got to that situation by not being responsible with credit in the first place.
Regarding the fraud, probably you are right. My credit account was frauded before, in a restaurant waiter scam. I had to pay the bill, but I did get the money back. And in the meanwhile, the maximum hassles I had to deal with was up to my credit limit.
You are worried about emergency surgery and I am worried about hassles from credit card fraud. That is your logic and that is my logic.
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Miami, FL
I have other funds that I have diligently saved. You are assuming facts that are not accurate.
Let's say I had a great investment opportunity that would benefit myself and many others and that the investment requires my 50k in saved funds plus another 50k. I would not be able to make that investment opportunity now that my 50k in credit line has been abruptly pulled. Further I might have already pledged the credit line with no thought that it would be abruptly pulled.
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Miami, FL
I think you missed my main point. The Miami Herald stated that there was a settlement between the banks and the states and that if you had a loan with one of the big banks you should call to see if you are part of the settlement via a loan modification, a refi,etc. I called wellsfargo as advised and asked about the settlement and the possibility of a refi to a lower rate or a loan modification then a couple of weeks later my credit line on for Chase credit cards was drastically cut back. Close to 50k in credit line vanished overnight! The timing is extremely suspicious. I think the banks conspire to target people's credit if they think you are a credit risk. If they just think you are a credit risk. In my case I was not. I have always paid my bills.
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Miami, FL
Credit is just that something you need secondary in case your primary is not sufficient. The secondary can be many things like you mentioned secondary funds for a large medical expense or would you rather tell a family member sorry we do not have the funds to save yor life.
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mrcharlesecurry says
I think that situation is even more nefarious than what you experienced.
Soon after the announcement of that settlement, the bank that has the mortgage on our residence "reached out" to us and offered us a "no-fees" rate reduction of 0.31% if we called their freakin' 1-800 # within a few days. They said it was because we're such good reliable customers.
I think the "offer" was probably legit., but the reason we were told for why they offered it to us was b*llsh*t.
We live in a neighborhood with many foreclosures, etc. The LTV ratio on our property is about 40%. I think the bank deliberately "reached out" to borrowers like us so they could go back to the government and say "see? - we're on it". But helping folks like us was not the intent of the settlement. Why didn't I take them up on their "offer"? We can get a better rate (0.5% rate reduction) refinancing with about $1500 in loan costs at a different major bank where we have retail accounts.
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Half Moon Bay, CA
Maybe you need a good lawyer.
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Call Chase and ask why.
Arguing on an internet forum is the worst idea to solve a "REAL" problem.
This website is mainly to vent the high real estate price.
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xeno,
seems like there is more to the story.
If s/he was such a prudent investor/borrower etc. like s/he says, then credit card companies will race to extend ("congratulations"!) credit and credit limits.