Warning On Home Equity Lines Of Credit
The FDIC's chief economist has a warning on the use of home equity lines of credit. "Richard Brown worries that home-equity lines could meet the same fate as credit cards did between 1982 and 1992. During that period, credit-card balances, adjusted for inflation, quadrupled -- as did consumer bankruptcies".
Read the story and be amazed at the recklessness of banks. Issuing credit cards and checks that are a direct draw on your homes equity! These borrowers are putting their home up as collateral for day to day spending. Note also that some banks build in measures to penalize customers for NOT spending enough and have rewards for bank employees if funds are drawn down quickly.