Wednesday, August 6, 2008

Morgan Stanley to freeze home-equity credit lines: report

Morgan Stanley to freeze home-equity credit lines: report

Wed Aug 6, 1:24 AM ET

Morgan Stanley (MS.N) told thousands of clients this week that they will not be allowed to withdraw money on their home-equity credit lines, Bloomberg News reported Wednesday, citing a person familiar with the situation. Most of the clients had properties that have lost value, the agency reported, citing a person who declined to be identified.

The second largest U.S. investment bank will review home-equity lines of credit, or HELOCs, monthly from now on, the agency said, citing the person familiar with the matter.

Morgan Stanley did not immediately return a call seeking comment.

In June, the investment bank said its quarterly earnings dropped 57 percent on weak trading, investment losses and a slowdown in investment banking, even after it realized $1.43 billion in one-time gains.

Shares of Morgan Stanley closed at $43.20 Tuesday on the New York Stock Exchange.

(Reporting by Tenzin Pema in Bangalore; Editing by Louise Heavens)

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