Quote:
Originally Posted by Robbie
I personally never knew anyone who got a second mortgage on their home for a car. Or for anything else EXCEPT home improvement. I had a buddy who did one to get his hands on a quick 30 grand to build a swimming pool. He borrowed on his home for that.
But I didn't know anyone that just took out a loan on their home to go get a car. I'm sure that a lot of folks did do the home improvement loans though. That's a very reasonable thing to do. Borrow against your own equity to improve the property and raise the value of it.
Unfortunately...if you borrowed that money in 2007 or early 2008 right before the free-fall...you got destroyed.
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Millions of people used the equity in their homes like an ATM machine through Home Equity Lines of Credit the last decade, creating huge consumer spending that did not include home improvement. Buying cars,vacations,second homes ..you name it, it was being bought with HELOCS.
Millions of these loans were being originated in California alone in the last big run up, sure alot more elsewhere as well.