Recently, there’s been a lot of talk about the lack of equity in American homeownership. While home equity loans such as HELOCs allowed people to pay for college and afford property improvements, they were also a drain on the economy.

Hot Property reports:

“…in at least 63 years, the amount of equity we have in our homes has fallen below 50%…

What’s particularly startling about that number is that even though the total value of America’s homes doubled since 1998 to more than $20 trillion dollars, the total mortgage debt grew even faster.”

Unfortunately, the lack of equity has led to the current crisis. Many of the people facing foreclosure could afford their homes if they had not taken out home equity loans. Maxing out HELOCs made many upside-down on their loans when property values began to decline.

See Also:

HELOC Freeze Help

Tags | Heloc, heloc crisis, home equity line of credit, mortgage crisis