According to a recent ABC article, American homeowners took out a whopping $1.1 trillion in home equity loans during the housing boom:

“For decades, owning a home has not just been a measure of achievement, it has also been a measure of net worth. When home prices were ballooning Americans took out a record $1.1 trillion in home equity loans, turning their homes into their personal A.T.M. machines.

“Now with housing prices dropping so dramatically at these unprecedented levels, we are actually seeing banks tightening up and its hurting people in ways they never thought they would be hurt before,” explained Wendy Bounds, a columnist at the Wall Street Journal and a “Good Morning America” contributor.”

With today’s dropping home prices, HELOC lenders have become wary of the huge lines they previously extended. Now, lending standards have tightened and lenders are limiting the amount of equity borrowers can draw upon.

See Also:

HELOC Lenders Reporting Losses

Fannie Mae Issues New HELOC Rules

Tags | Heloc, home equity loan, real estate