Credit Crunch: Home Equity Lending Evaporates

Yahoo Finance ^ | 25 December 2009 | Adrain Sainz

[MeneMeneTekelUpharsin]

I simply can not tell what is the truth any more. The government and some of the media say one thing, and conservatives here and other stories say another. What confusion!

[tflabo]

Seems obviously a fairly bad idea to borrow against the equity of ones home value.

[pogo101]

It is if it’s not either a terrible emergency or something that adds greatly to the value of the home. Usually folks treated HELOCs as piggy banks for luxuries and vacations.

[E. Pluribus Unum]

They don't get it.

We all know that the rock-n-roll days of spending every cent you can aly your hands on is over.

But our moral and intellectual superiors in the Democrat/MSM-complex haven't figured it out yet.

[EagleUSA]

The lenders do NOT trust Washington. They are smart.

And the lenders want to stay liquid with proper cash reserves.

“Houston, we have a problem in Washington.”

[JPG]

My house is at least 90K underwater. Thanks, Zer0.

[foyen]

I owned a home improvement company for 10 years(room additions, sun rooms, windows, etc.) until its sale in November 2007. Nearly all my customers used equity loans or lines of credit. Some banks were loaning 125% of appraised value. At the time, I thought it was nuts. At this stage in life I don't have a mortgage anymore and would never borrow money on my primary residence. As much as it underpinned the success of me business, it always made me uncomfortable that people were hocking thier homes.

[PGalt]

Thanks for posting and being here.

“I simply can not tell what is the truth any more.”

Breathe deep the gathering gloom...(music to read your post by)...

http://www.youtube.com/watch?v=dROSy-RElq0

[Graybeard58]

I’ve had a home equity line of credit of $15,000 for about 15 years, I’ve used it a couple of times but not in several years.

It cost me nothing to get it and interest is currently 4.5%, the account is still active, I owe nothing on it nor do I have a first mortgage.

It’s a fairly cheap line of credit....To be used responsibly.

[benewton]

We don’t have a house, we have our home.

And you don’t bet your home for any reason.

[radioone]

Those Home Equity Loans, plus the depreciation in the value of the home, is another reason the FDIC is hiring 1,500 more employees...something like an additional 600 in California alone. Expect a lot of banks to fail in 2010.

[MrEdd]

Of course, if one owns a home worth forty eight thousand, and then developers build three or four neighborhoods full of six thousand square foot new McMansions, for which there are no buyer... then on may find one’s self suddenly owning a twenty nine thousand dollar home instead.

Which how many of us have warned about for the last three or four years?

[cornelis]

Are you saying borrowing is a bad idea?

[Lancey Howard]

LET’S LIVE FOR TODAY
Grass Roots

When I think of all the worries people seem to find
And how they’re in a hurry to complicate their mind
By chasing after money and dreams that can’t come true
I’m glad that we are different, we’ve better things to do
May others plan their future, I’m busy lovin’ you (1-2-3-4)
Sha-la-la-la-la-la, live for today
Sha-la-la-la-la-la, live for today
And don’t worry ‘bout tomorrow, hey, hey, hey
Sha-la-la-la-la-la, live for today
Live for today
We were never meant to worry the way that people do
And I don’t need to hurry as long as I’m with you
We’ll take it nice and easy and use my simple plan
You’ll be my lovin’ woman, I’ll be your lovin’ man
We’ll take the most from living, have pleasure while we can (2-3-4)
Sha-la-la-la-la-la, live for today
Sha-la-la-la-la-la, live for today
And don’t worry ‘bout tomorrow, hey, hey, hey
Sha-la-la-la-la-la, live for today
Live for today
Baby, I need to feel you inside of me
I got to feel you deep inside of me
Baby please come close to me
I got to have you now, please, please, please
Gimme some-a lovin’, gimme some-a lovin’
Gimme some-a lovin’, gimme some-a lovin’
Baby gimme some-a lovin’
Gimme some-a lovin, I need all your lovin’
Gimme some-a lovin, I need all your lovin’
Give me some love, now
I need all your lovin’
Sha la la la la la
Sha-la-la-la-la-la, live for today
Sha-la-la-la-la-la, live for today
And don’t worry ‘bout tomorrow, hey, hey, hey
Sha-la-la-la-la-la, live for today.

[FastCoyote]

[The government and some of the media say one thing, and conservatives here and other stories say another. What confusion! ]

I do commercial real estate and business brokerage. What I know is that businesses always (Always!) cook the books. So, you always have to do your own analysis, write your own estimated P&L and balance sheet to get an idea what a property or business is worth.

The government is nothing but a big business. No matter what they are telling you, you have to look at what the real numbers must be. When I do that analysis of our government I don’t see anything but red ink as far as the eye can see. The amount of revenues conceivably possible from tax revenues cannot sustain unfunded labilities in SS and medicare, and we know Fannie and Freddy are BK and now sitting on the Feds books. It goes on and on.

In short,I don’t think we can believe a word that the gov and media are telling us because the numbers simply do not add up. While this is scary as hell, it is also a potential opportnity. If you are smart enough to hunker down now, you will survive and perhaps even prosper. But if you run onto the newly exposed beach to collect seashells after an earthquake, don’t be surprised when the tsunami hits.

[maine yankee]

This goes right along with the ‘re-fi’ folks who believed what goes up, never comes down.

I can’t count the number of sob stories I’ve heard which somewhere include the phrase”took the equity out when we refinanced”.

[org.whodat]

Tell the truth about what, if you have bought in the past 10 years you are most likely underwater.

[HerrBlucher]

Who knew home values wouldn’t skyrocket forever and ever...?/s

[The_Media_never_lie]

I simply can not tell what is the truth any more. The government and some of the media say one thing, and conservatives here and other stories say another. What confusion!

When it's pie in the sky and sugar plums and dancing girls for all at no additional cost vs. a bitter pill, which would you tend to believe?

[Kansas58]

Yes and no.

NO, because bankruptcy can eliminate unsecured debt.

YES, because:

The interest becomes tax deductible.
The payments can be spread over SEVERAL years, which might increase cash flow to invest or pay down other expenses.
The interest will be very low, compared to unsecured or revolving debt.