Banks just love the profits in home equity loans. They got burned in the late 80’s, they got burned in the 2,000’s and here we are again, 8 years later. But a lot of the problems with home equity loans are not because of banks, but consumers and state legislatures. Consumers have to be more responsible and state legislatures need to put in safety nets so consumers don’t get hurt. Texas is a great example of this. They weathered the recession better than any state in the union partially because the Texas Congress wrote laws stating what banks can and cannot do in their state. Unlike Florida.

Great article by Deon Roberts with Charlotte Observer
“Banks, eager to speed up their sluggish revenue growth, are returning to a business that lost appeal during the housing downturn: home equity lending.

Consumers are hearing the pitches in direct mail, in their inboxes, and in their bank branches. Lenders say the competition to capture home equity business is heating up – and they’re looking to sweeten the deals with flexible terms.

Banks see home equity as a growing market, with home prices rising in Charlotte and elsewhere. Some borrowers who once owed more than their homes were worth now find they have equity for the first time in years.”

What is a Home Equity Loan? – Explained

Unlike the vast majority of mortgage documents (Fannie Mae, VA, FHA) that have standard verbiage in them that does not let them take advantage of the consumer, HEL’s can be very tricky. So read everything before your sign anything.

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