LOS ANGELES – While the Palisades Fire is still burning, Lisa Pelton and some of her neighbors in Mandeville Canyon got a surprising message from their bank: their home equity lines of credit were being cut.
“I was shocked,” Pelton told KTLA 5 News on Thursday. “I found what they did to be unfair.” They mailed this letter to everyone in a specific ZIP code four days after the fire began.
City National Bank told Pelton that it was suddenly reducing her home equity line of credit (HELOC) by $50,000, even though her property was not affected by the fire that burned 23,000 acres.
“I believe the person who approved that letter should be dismissed,” she said.
City National Bank explained that Pelton’s home and other properties in the wildfire area had lost a lot of value. The bank said it would lower her line of credit instead of canceling it completely until they can make more estimates.
KTLA consumer reporter David Lazarus questions not the bank’s reasons but its time and urgency.
Financial companies need to reduce their risk after a natural disaster. “That’s all clear,” Lazarus said. Homeowners should be worried about how quickly City National Bank acted and that it didn’t appear to check things carefully before making decisions. It cut first and asked questions later.
Pelton resisted. She called City National Bank and talked to someone who was understanding about her position, she said. The bank changed its mind and gave her HELOC back.
Lazarus said this case should teach all people in similar situations a lesson.
“People are feeling very vulnerable right now, so they may not react aggressively or responsively.” Lazarus said, “If you don’t stand up for yourself, no one else will.”
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