Morgan Stanley Said to Freeze Home-Equity Credit Withdrawals

Christine Harper
Bloomberg
Thursday, Aug 7, 2008

Morgan Stanley, the second-biggest U.S. securities firm, told thousands of clients this week that they won’t be allowed to withdraw money on their home-equity credit lines, said a person familiar with the situation.

Most of the clients had properties that have lost value, according to the person, who declined to be identified because the information isn’t public. The New York-based investment bank will review home-equity lines of credit, or HELOCs, monthly from now on, the person said yesterday.

Wall Street firms including Morgan Stanley are ratcheting back on risks after the collapse of the subprime mortgage market and ensuing credit contraction saddled banks and brokerages with almost $500 billion of writedowns and losses. Consumers fell behind on home-equity credit lines at the fastest pace in two decades in the first quarter, the American Bankers Association reported last month.

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“Morgan Stanley periodically reassesses client property values and risk profiles,” said Christine Pollak, a Morgan Stanley spokeswoman in Purchase, New York. “A segment of clients was recently notified of a change in the status of their home- equity line of credit, or HELOC, due to a change in the value of their property and/or their credit profile.”

Pollak declined to specify the dollar amount of the frozen credit lines. The firm’s global wealth management division, which doesn’t disclose how many clients it serves, had 8,350 advisers managing $739 billion of customer assets at the end of May, according to its second-quarter earnings report.

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5 Responses to “Morgan Stanley Said to Freeze Home-Equity Credit Withdrawals”

1. Heimlich Says:
   August 7th, 2008 at 5:43 am

   If you’re smart take out your max HELOC credit limit and walk from your house. It’s a legal way out of the banking fraud mess. For those idiots who say, oh that’s immoral, fuck them. You are brainwashed to obey social rules by the very criminals who tramp all over you. Fight fire with fire. Use every LEGAL tactic you can to save your nest egg.

2. Aaron Says:
   August 7th, 2008 at 10:12 am

   When the system is designed to bankrupt you and eventually enslave you then what Heimlich says is right. It is your moral imperative to not play the game according to their rules but according to the necessity of protecting your family’s future.

3. SNG Says:
   August 7th, 2008 at 6:22 pm

   Do not play by their rules because they are a group of faceless, greedy, robber-barrons running a legitimized financial mafia.
   The financial mafia (banks, credit lenders, etc) have a computer run your credit report and run property appraisals and then they block your access to your credit line.
   After the restriction of credit, they will wait until you are a broke and foreclose on your home.
   This is the nature of the beast, it is the techno-economic war
   on the masses. They manipulate the necessities of survival to destroy your financial viability and eventually your own existence.
   Protect yourself, protect your family, and other humans before the machines take over every aspect of humanity and regulate the decisions of life and death.

4. SNG Says:
   August 7th, 2008 at 6:25 pm

   I agree with Heimlich, while legal rules still exist, use the legal system against the techno-economic war machine.

5. Himmler Says:
   August 7th, 2008 at 7:05 pm

   I have to agree with Heimlich and Aaron. To sum it up: “Make sure you get yours.” The bankers and politicians sure as hell are. I just hope that one day, I PRAY that one day, the American People will rise up against this tyranny and end it. Jefferson actually believed that a revolution of sorts was necessary to maintain a free state. I have to agree. It’s time Americans started realizing that they’re paying billions in interest on money that’s already theirs. 2% from the Fed and the banks then up it to 5%. Well, what’s the 2% premium doing except lining the pockets of politicians and the gestapo? We The People appoint Congress to ‘issue currency and derive the value thereof.’ The “Federal Reserve” is the biggest scam in the history of the world. When Americans realize what’s truly happening behind the scenes of their government, that day will be very exciting. The existing fascism is unacceptable. Jefferson was prophetic when he stated: “If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations [that] will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”