by Calculated Risk on 8/05/2008 05:53:00 PM

From Bloomberg: Morgan Stanley Said to Freeze Client Home-Equity Credit Lines (hat tip Brian)

Morgan Stanley ... told several thousand clients this week that they won't be allowed to withdraw money on their home- equity credit lines ...

``Consistent with the terms of the HELOC, or home-equity line of credit, Morgan Stanley periodically reassesses client property values and risk profiles,'' said Christine Pollak, a Morgan Stanley spokeswoman in 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.''

A home equity line of credit implies the borrower has some home equity left. Morgan Stanley is just the latest lender to freeze HELOCs for clients with insufficient home equity due to falling property values.