Many of us use obtain an equity line of credit to have as an emergency fund. Why tie up cash if you can write yourself a check when you need it. Isn't this one of the ways the banks market the equity line?
Yesterday I received a panic call from a past client that had obtained the line of credit in November 2006 when his home appraised for $675,000. His equity line bank reviewed his file, ran an AVM to determine a current value that was 19% lower. This dropped the loan to value below what was necessary to qualify for the equity loan so the bank notified them that the line of credit was being cancelled.