Will it happen in your neighborhood next? This tree lined street, well-kept homes, and family friendly, it's where the Ensmingers live and out of the blue it happened to them.

Hank Phillippi Ryan"When you opened the letter, how surprised were you?"

Dan Ensminger, homeowner  "Very surprised."

They've owned their suburban Massachusetts home for 30 years, their kids grew up here. They made every mortgage payment on time, and then decided the place needed a little updating. The woodwork, the wallpaper, the linoleum, the kitchen. The applied for a home equity line of credit and got it. $57,000.  And then a year later, with this one shocking letter, the bank took half of it it away.

Hank Phillippi Ryan"When you signed the contract, did you know this could happen?"

Dan Ensminger, homeowner  "No, I didn't."

Hank Phillippi Ryan"They just took away your access to $27,000!"

Dan Ensminger, homeowner  "That's correct".

Our investigation found homeowners lines of credit suddenly being cut in half, and even totally cancelled. Bank officials refused to tell us how often it happens but we found consumers, stunned, holding bills for home improvement, college tuition, credit card payoffs and even gas and food, now scrambling for cash.

Ruth Susswein, Consumer Action"If you know you have credit one minute and the next minute its disappeared, it's very hard to make plans for the future."

Dan's kitchen update? The wallpaper changes? The new floor? Not going to happen.

Dan Ensminger, homeowner  "It's causing me some anxiety right now. I thought that this was money that was going to be there."

It's all legally disclosed in Dan's loan contract and bank officials say that's standard.

Bruce Spitzer, Massachusetts Bankers Association  "It's not uncommon that it's happening here, not surprising, as well as the rest of the country."

You certainly got these offers in the mail. Lenders letting people draw money based on the equity in their homes, all assuming home values would keep going up.

Now banks say they're chopping credit lines to protect their investments.

Bruce Spitzer, Massachusetts Bankers Association  "It could happen to anyone in a declining market where we've seen home values go down."

Banks insist the cuts actually protect homeowners. If you suddenly can't make the payments on your line of credit the bank could take your house.

Still, homeowners who have a piece of paper that means money now know it doesn't mean they can keep it.

Hank Phillippi Ryan"Did it cross your mind that this could happen?"

Dan Ensminger, homeowner "Well I've been doing this for a number of years and this is the first time ever. But then again, we haven't been in this kind of a market before. I guess you live and learn."

You should know if your credit line is cut you may be able to appeal that decision especially if you've already sealed a deal to spend it.

(Copyright 2008 Sunbeam Television. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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