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appraisal found that the house had actually increased in value to $1.07 million. The bank later reinstated the owner’s credit line.

On a house in Arlington, Texas, originally valued at $172,000, an automated valuation model lowered the amount to $151,000. On appeal, the owner presented a physical appraisal completed 10 days before the bank’s action that put its market value at $165,000. Nonetheless, the bank refused to reinstate the credit line, based on a revised requirement lowering maximum loan-to-value ratios on total debt to 70% from the previous 80%.

Though the litigation will be contested primarily on the grounds of alleged violations of truth in lending procedures and state consumer protection laws, the accuracy and use of automated valuations will be hovering in the background. Leaders in the automated valuation model field such as Tim Grace, senior vice president of CoreLogic, say “commercial-grade AVMs have proven over decades of testing to provide accurate, independent and consistently reliable estimations of property value.”

But lawyers for the homeowners say nothing should distract attention from the context surrounding JPMorgan Chase’s mass freezing of credit lines shortly after accepting $25 billion in emergency liquidity funds from the Treasury, which the bank has since repaid.

“They took the government’s money, which was supposed to help them to lend to people who needed credit,” Woodrow said. “But instead they cut them back.”