[BlackVeil]

A sadder situation described on the same blog is that of a 62 year old California homeowner who purchased his house in 1975 for $38,000. He refinanced "3-4 times over the years" mainly for "personal use - cars, etc." The first lien is now $365,000. He opened the HELOC seven years ago and continually tapped into it. The outstanding balance on it had climbed to $265,000. Because the condo had plunged in value to only $350,000, this homeowner stopped making payments on the first mortgage four months earlier.

This sounds like compulsive spending and the "homeowner" - not really an owner because of all his debts - is very silly. The banks are silly as well, of course.

[RachelFaith]

Oh Buddy.

This is for real. HELOCs are WAY WAY over the mark.

We haven’t seen the end of this economy yet.

The bottom is way way far off.

[napscoordinator]

People are so stupid. Home equity is not a bank account. It is the beginning of folks paying off their homes. People use this money to pay off credit cards? How stupid. If people are going to burn for this...it is their fault.

[gleeaikin]

I am so glad I did not get caught up in the housing bubble frenzy. I did get HELOCs on two properties that I owned free and clear, but only for about 1/5th the value of each. At 3.25% this enabled me to pay off all credit cards, continue making the HELOC payments and do major repairs and improvements on these 100 year old properties. I just hope and pray that the 3.25% rate continues for several more years, by which time I should have enough rental income to pay them off quickly.

[caver]

This article describes pure stupidity on the part of “homeowners”. I have no sympathy for these idiots. I recall some Freeper on here in the past telling me how superior California is to my home state of Indiana. Suffer and die California!

[mac_truck]

One thing the autor failed to mention is the recourse nature of home equity loans. Foreclosure does not automatically resolve the debt, even in a nonjudicial foreclosure state like California.

Caveat Emptor.

[Rational Thought]

This is a real bad topic to bring up if you’re Wells Fargo.

[Presbyterian Reporter]

Not mentioned in this story is that crackpot Chairman of the Federal Reserve Alan Greenspan. In the late 1990’s/early 2000’s it was Alan Greenspan who was patting himself on the back for getting homeowners to take out home equity loans.

You can blame stupid homeowners, but the stupidity began at the top. Namely, the FED and Congress.