Little by little, millions of Americans surrendered equity in their homes in recent years. Lulled by good times, they borrowed ”” sometimes heavily ”” against the roofs over their heads.
Now the bill is coming due. As the housing market spirals downward, home equity loans, which turn home sweet home into cash sweet cash, are becoming the next flash point in the mortgage crisis.
Americans owe a staggering $1.1 trillion on home equity loans ”” and banks are increasingly worried they may not get some of that money back.
To get it, many lenders are taking the extraordinary step of preventing some people from selling their homes or refinancing their mortgages unless they pay off all or part of their home equity loans first. In the past, when home prices were not falling, lenders did not resort to these measures.
Such tactics are impeding efforts by policy makers to help struggling homeowners get easier terms on their mortgages and stem the rising tide of foreclosures. But at a time when each day seems to bring more bad news for the financial industry, lenders defend the hard-nosed maneuvers as a way to keep their own losses from deepening.
What would happen if a few fly-by-night lenders would be forced to pay the difference between a sub rate and full rate mortage?? My folks could not afford a house till late in life but that didn’t keep my sister and I from growing up as responsible citizens. We were very blessed by our Lord even if some times we were not aware of it.