Morgan Stanley told thousands of clients this week that they will not be allowed to withdraw money on their home equity credit lines, a person familiar with the situation said.
Most of the clients had properties that have lost value, according to the person, who asked not to be identified.
The New York company will review home equity lines monthly from now on, the person said Tuesday.
Christine Pollak, a Morgan Stanley spokeswoman in Purchase, N.Y., said: "Morgan Stanley periodically reassesses client property values and risk profiles. 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."
She would not give a dollar amount of the frozen credit lines.