A co-worker and friend of mine told me an almost unbelievable story about his home equity line of credit with GMAC Mortgage.  He and his wife recently had their 4th child, and wanted to build an addition to their house.  They received a $50,000 line of credit with a small book of check to use to pay contractors.  At some point, they ran out of checks and requested more from GMAC.  Within a week or so, they received checks and the wife wrote a $5,000 check to a contractor, one of the final payments for the project.  Unbeknown to her at the time, the new set of checks was a sheet of MasterCard checks, not a HELOC check.  This unfortunate mistake caused a new MasterCard line of credit to be opened, with a 3% check-writing fee applied to the new balance.  My friend, who normally has a very calm and friendly demeanor, was understandably irate with this seemingly intentional bait and switch maneuver by GMAC.

 After a brief forensic investigation, and a number of calls to GMAC customer server, my friend discovered what happened.  The HELOC apparently came with a MasterCard offer with check-writing priviledges.  The checks received in the mail coincidentally arrived shortly after his wife requested new HELOC checks.  Expecting HELOC checks in the mail, she didn't think to read the fine print on the back of the sheet.  So, would GMAC help them out of this misunderstanding?  GMAC did agree to refund the check-writing fee.  But when my friend asked to transfer money from the HELOC to close out the MasterCard balance, the agent informed him that regretably, his line of credit was recently frozen due to general economic downturn and lower home values!  A second stroke of bad luck, and GMAC could not, or would not, unfreeze the HELOC to help out this customer.

 Well, my friend was able to scrounge up enough spare cash from his emergency fund, along with an early tax refund to pay off the MasterCard bill without incurring a fee.  It was painful and exasperating, but he got away with only a few wounds, and no permanent damange.  The lesson is to be very careful when you receive checks in the mail.  Check, then double-check exactly which account they belong.  Otherwise, you may be stuck with a new account and heavy fees. I haven't heard a large number of complaints about GMAC, but this incident certainly makes me very wary of that company.  My primary mortgage is with GMAC, so I will keep an eye out for supsicious checks from them!