The local housing economy made page one of the A and C sections of the Washington Post this weekend. The Housing Bubble Blog and Calculated Risk readers are also discussing these articles:
Homeowners Losing Equity Lines
"Now that home prices have dropped in many parts of the country, lenders are nervous that they may never collect the money that they extended to borrowers. They are responding by freezing or lowering the credit limits on home equity lines . . . .
'Nearly all the top home equity lenders I know of are doing this or considering doing this,' said Joe Belew, president of the Consumer Bankers Association, which represents some of the nation's largest home equity lenders. 'They are all looking at how to protect themselves as real estate values go down, and it's just not good for the borrowers to get so overextended'.
. . .
Larry F. Pratt, chief executive of First Savings Mortgage in McLean, said most mortgage documents he has seen give lenders wide latitude to suspend or freeze credit lines. . . . Maggie DelGallo did not realize that when she took out a home equity line a few years ago on her home in Loudoun County. Her lender recently froze the line.
DelGallo, a real estate broker, has used some of her credit line over the years. Had she known the freeze was coming, 'I would have drained it,' she said. 'I would have taken every dime and possibly placed it in a money-market vehicle.'"
Housing Rut Derails Host Of Dependents
"Richard Clinch, a researcher at the University of Baltimore, said that from 2001 to 2005, as much as half of the job growth in metropolitan Washington was linked to the soaring real estate market. Many of those workers are 'hidden' in jobs not widely thought of as linked to home sales, he said. The chain of workers involved in real estate deals has grown over the years, largely because of the money at stake".