I just gotta wonder what all this HELOC reduction/freezing is gonna do to housing. How many people had been subsidizing themselves with this kinda money? The economy for all its writedowns and job losses really hasnt been bad. No depression style collapse.
My thought is that alot of the people in the RE related industry have been using this as a safety net. How many people have maxed out the HELOC, borrowed against the 401k, killed whatever little savings they had? All have perfect payment histories and dont show up on any default lists. So they put the house up, but it isnt worth what their loans total too (if it did the HELOC wouldnt be gone) so it sits until they stop putting everything into it OR have nothing left to put into it and lose the house. Maybe a short sale if things are not too bad and they act quickly. Eventually foreclosures keep going up and the calls for a bailout get louder.
The original poster here wanted to use his HELOC to invest in RE. Now that it is gone, he’ll just have to do it like the rest of us poor shlubs. But these people have been using it to subsidize their lifestyle after job loss. We are looking at a recession, with alot more job losses, I just wonder how many of these people are out there.
BTW, an interesting side note. This couple is using the HELOC to subsidize her lost job. Cept she didnt lose her job, she is now on a contract basis and has only collected 1 paycheck so far this year. Doesnt show up on Unemployment lists, but does the job wrecking her finances just the same.
