Home equity lines of credit have been very popular in the last 10 years or so. People found it a wiser financial decision to borrow against their home than to charge their credit cards and a good way to get some cash. Banks were encouraging this behavior and advertising home equity lines of credit available. Home owners "cashed out" their equity to remodel, pay off credit cards, buy new cars etc. Because lines of credit are mortgages they are tax deductible. This seems like a wise decision but with the financial difficulties facing millions of home owners today this has become quite a problem. Today you will be hard pressed to receive any line of credit from a bank. First of all many home owners owe more on their home than it is worth in todays market. Second, banks are not funding these lines of credit to begin with and reducing credit limits on lines already loaned. This has affected the economy in general.
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