Posted on 03/28/2016 6:36:42 AM PDT by Lorianne
At hardware stores along the U.S. East Coast in recent weeks, TD Bank has been trying to persuade shoppers to think bigger than paint and plumbing supplies: The bank wants them to start taking cash out of their homes again. The TD Bank tour bus, equipped with a galley kitchen and iPads where homeowners can start the application process, is part of a marketing push unusual for the mortgage industry since the housing bust. As the broader mortgage market remains in the doldrums, banks are again touting home-equity lines of credit, which allow homeowners to draw down the equity in their home as they need the cash, as well as cash-out refinances, which involve taking cash out of a home while refinancing and ending up with a larger mortgage balance.
The effort is gaining steam as banks try to offset faltering mortgage originations and a refinancing wave that is fizzling out. Lenders are betting that offers for home-equity lines of credit, or helocs, will resonate with many borrowers whose home values are higher than they were just a couple of years ago and who need cash for renovations or other expenses after holding on to their homes for longer than expected. Lenders extended just over $156 billion in home-equity lines of credit last year, the largest dollar amount since 2007, the beginning of the housing bust, according to new figures from mortgage-data firm CoreLogic. That marks a 24% increase from 2014 and a 138% spike from 2010 when new approvals hit a low point. The average line amount extended to homeowners last year reached a record $119,790, according to the firm, which tracks the data back to 2002.
(Excerpt) Read more at wsj.com ...
Debt, debt, and more debt. It’s the American way.
Fool me once...
mortgage yourself to the hilt hell you’ll feel rich......for a little while
If people had just a little more economic sense, they wouldn’t do this. But when you have 1/2 of Americans believing that “democratic socialism” is good, it spells disaster. If a bank wants to offer this, fine. The 2020 Presidential candidate slogan will be “equity line forgiveness”.
The housing market in my area is screwed for the long-term; the area NJ/NYC is circling the drain. Both states are on the list of states where over 25% of people are foreign-born; Americans (and their employers) are evacuating the area. Nobody wants to invest in a home that will have no buyers (5, 10, or 20 years down the road).
I’m surprised they are so frank in admitting this is just to keep lending staff employed (referring to the fall-off in new originations, refis); this whole region seems determined to resist economic Darwinism.
Be prepared....it’s coming again...just in time for a GOP president
I wonder if this is going to be in lieu of, or a precursor to, the coming helicopter money.
I had an uncle who took out a second home mortgage — on a house that was close to being paid off — to pay for lavish weddings for his two daughters, a new car and an expensive cruise with his wife. Now he’s 63 and realizing that he won’t pay off his house until well AFTER he is retired.
I wouldn’t be surprised if this campaign is unsuccessful (at least in my area - northern NJ); many here witnessed the wave of foreclosures coupled with job losses, and are terrified of debt/bankruptcy. Those who aren’t tied to mortgages are in no rush to do so, unless they have a lot of seniority in a government job (and therefore have a reasonable expectation of employment for life). Our property taxes are so high that adding anything to our monthly mortgage payments is unlikely.
Over a trillion dollars has been handed out to banks since 2008. The idea was that banks would inject this into the economy as a stimulus, but it didn’t work that way. The banks hoarded the cash and kept it. Now they are going to take this money (taxpayer money) and graciously loan it back to homeowners, at an interest rate. Wow. Great.
With interest rates near zero, why not try to get American homeowners to play the sucker and pay 5% - 7%. And hey, if a bunch of homeowners get in to trouble they can always get Fannie or Freddie to bail them out as they are securing the loans anyway.
How can the banks lose?
These cretins are going to succeed in getting a Bernie elected. And then they shall reap EVERYTHING they have sown.
The way things are now, this new generation of homeowners just might have an expectation of bankruptcy in their futures. Take the money and run.
No, thank you!
Good point. If a repub manages to win, the media will turn on a dime and start howling about how bad the economy is because a repub was elected. There are enough uneducated people who will believe it and the snowball will get started.
All brought to us by our fiat, unbacked currency, and the Federal Reserve. They are the oxygen and life-blood of progressive-left government.
Seems to me they’d rather have Hillary.
Repeat this over and over until it become part of one's existence.
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