Regulatory Guidance on Home Equity Lines of Credit (HELOCs) Nearing their End-of-Draw Periods
In July 2014, the federal banking regulators issued guidance on HELOCs that are nearing the end of their draw period. As HELOCs end the draw period and enter an amortizing payment period or a balloon payment, banks may experience an increase in delinquencies as some borrowers struggle to meet the new payment schedules.