Florida Lawmaker Investigating Lenders for Home Equity Loan Fraud

Florida's incoming ""Senate President Mike Haridopolos"":http://www.senatormike.com is calling for a round of hearings to investigate claims that banks are ""squeezing"" borrowers by fraudulently or arbitrarily reducing Home Equity Lines of Credit (HELOC) to improve their own bottom lines.

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""I have heard the stories of this happening across our state and our country, and the courts are filled with lawsuits,"" says Haridopolos (R-Merritt Island). ""This needs to be investigated because if true it's outrageous. The very banks that are bailed out with taxpayers' money then stick it to homeowners?""

Not only is Haridopolos bringing accusations of HELOC fraud into the public spotlight in state-led hearings in Tallahassee, but he's asking his Washington counterparts to call their own hearings on the matter.

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""When Congress gave away the taxpayers' money to the banks, they guaranteed the public that if the banks did not use it to lend money, they would immediately call for hearings and hold the banks accountable,"" Haridopolos said.

The press statement from Haridopolos' office specifically referenced a statement from U.S. Sen. Chris Dodd (D-Connecticut), in which he said, ""If it turns out that [the banks] are hoarding, [t]here will be hell to pay.""

Haridopolos added, ""[W]e have seen the president sit down with the leaders of the big banks and refuse to meet with the average Americans who are being hurt by their practices….The banks may control D.C., but the people control Florida and we're going to keep it that way.""

Federal regulations permit HELOC suspensions when borrowers' financial situations adversely change or when properties suffer a significant decline in value - which is certainly the case in Florida markets. But according to Haridopolos many homeowners are claiming banks have been using false pretenses as excuses to freeze the line of credit and call in home loans.

The state senator says there have been a slew of private lawsuits against some of the biggest banks, which he says have engaged in such behavior.

Haridopolos plans on calling homeowners, consumer groups, and the banks to testify at the state hearings, ""so that everyone has a chance to publicly weigh in,"" he said.