We have started reviewing our HELOC portfolio to determine if property values have declined enough to warrant freezing the line to further advances.

It's my understanding that you have to send the borrower a notice within 3 days of taking action. We do not have a letter prepared for this purpose yet.

Are there any suggestions or specific requirements for how the letter should be worded?

While I can't answer your question specifically, consider other ramifications as well. When I recently did a webinar on consumer complaints, my co-presenter from the OCC Ombudsman's Office (Craig Stone) said they are seeing increasing complaints over this. If a line is reduced, this can impact the borrower's credit score in a negative manner. I'm not saying don't take action, but I am saying look for other consequences and try to mitigate problems.