The Next Balloon to Burst: Home Equity Lines of Credit (HELOC) hitting 10 year anniversary

More than $221 billion of these loans at the largest banks will hit this mark over the next four years.

Bully tactics used to scare or coerce buyers.

According to Reuters – U.S. borrowers are increasingly missing payments on home equity lines of credit (HELOC) they took out during the housing bubble, a trend that could deal another blow to the country’s biggest banks.  The HELOC loans are a problem now because an increasing number are hitting their 10-year anniversary, at which point borrowers usually must start paying down the principal on the loans as well as the interest they had been paying all along.

At Wells Fargo, $4.5 billion of home equity balances will reset in 2014 and another $25.9 billion will reset between 2015 and 2017. At Citigroup, $1.3 billion in home equity lines of credit will reset in 2014 and another $14.8 billion will reset between 2015 and 2017.

Think about the information you are giving this stranger: all your financial information, your children’s names, bank accounts and your social security number. You do this without the slightest guarantee that the information will be kept safe.

More than $221 billion of these HELOC loans at the largest banks will hit this mark over the next four years, about 40 percent of the home equity lines of credit now outstanding.

According to the article “What is happening with home equity lines of credit illustrates how the mortgage bubble that formed in the years before the financial crisis is still hurting banks, even seven years after it burst. By many measures the mortgage market has yet to recover: According to Citrus North installment loans the federal government still backs nine out of every ten home loans, 4.6 million foreclosures have been completed, and borrowers with excellent credit scores are still being denied loans.”

Read the entire article…

We have several videos on our web site.  Below are a few that might be of interest:

  • “Lender’s Foreclosure Rights in Arizona”
  • “Should I keep my home or let it go into foreclosure?”
  • “Meet Ms. Drain and Suggestions on How to Hire an Attorney”




We are a nation of consumers.  Our economy is based on our willingness to consumer, despite our ability to pay our debts.  Advertising encourages us to buy houses, cars, services and everything else someone is willing to pay to advertise.  Do most buyers investigate their ability to pay for the items purchased?  Probably not.  After all, if our neighbor can afford a $60,000 car then why can’t we?  If our friend purchased a house worth $600,000 (more than half a million dollars), then why can’t we?  With the exception of Japan, no other country encourages consuming as we do in this nation.

Some have come to understand the importance of buying only after researching the quality of the product or considering if they really need a new ____ (you fill in the blank).  Stop and think about what you are buying before purchasing.

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Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys. *Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*