Wednesday, February 6, 2008
Well, Duh! Everybody, everywhere is exposed to subprime
Several banks issued statements this week saying they were temporarily suspending withdrawals from open home equity lines out of concern that borrowers could owe more than the house is worth. Historic declines in property values have stripped many local homeowners of their safety nets as lenders freeze lines of credit ---- even on people who are current on their mortgage payments. "It's an emotional hardship," said Patti Lien of Menifee. "We kept our credit good. We've done everything right, and this is what we get because Countrywide made all these crappy loans." Home equity lines of credit are loans that use a home as collateral and allow the borrower to withdraw money up to a maximum credit limit.