Daily Real Estate News  |  December 7, 2007  |   Home Owners Less Likely to Tap Home Equity
Home equity loans are on the decline, and mortgage industry experts say many home owners will not be using their homes this year as ATMs to finance their holiday purchases.

Consumer spending financed through home equity loans rose every year from 1995 to 2005; and although data is not available for 2006, the trend is believed to have continued last year.

However, banks are said to be pulling back on underwriting this year; and Freddie Mac estimates that only $60 billion in cash was taken out of homes in the third quarter, down 26 percent from the previous three-month period.

"Recent events in financial markets may make it harder for some borrowers to qualify for cash-out refinancing, and declining home values will also limit options for some borrowers," said Amy Crews Cutts, Freddie Mac deputy chief economist, in a statement that accompanied the survey.

Source: Monterey County Herald (CA), Mike Meyers (12/04/07)