Mortgage Companies Blunt Attempts to Stimulate the Market

From the LA Times:

Countrywide Financial Corp. sent letters to 122,000 customers last week telling them they could no longer borrow against their credit lines because the total debt on the home exceeded the market value of the property. The lender says it is using computer modeling to determine which of its customers would have their cash spigot shut off ....

The tightening of credit could help limit the effectiveness of interest-rate cuts by the Federal Reserve and an effort by Congress and the White House to put more money in the hands of Americans via tax rebates and other economic measures.

Hey, I think its great that consumers are finding credit harder to get, but what kind of belt-tightening is being demanded of mortgage companies? They're only protecting their skyrocketing bankrolls.