Ed Dodson responding... Bryan Caplan wrote: > Why isn't virtually everything financed by home equity loans? The tax > advantage seems so large, and the loophole looks big enough to drive a > truck through. What am I missing? > Ed Dodson here: Other than the purchase of a house, we may be moving in the direction of more cnsumer purchases being made using a line of credit collateralized by a mortgage on a person's house. This is being facilitated by the introduction of "debit" cards. From a lender's perspective, however, there is some increased risk based on lien position and whether there is real collateral value in the house. An appraisal is not generally cost effective to perform, so lenders have to rely on data that tells them values in a given neighborhood are stable or have increased. Why the equity line of credit is not used even more than it is has much to do with consumer education and the entrenched nature of credit card use.
begin:vcard n:Dodson;Edward tel;fax:215-575-1718 tel;home:856-428-3472 tel;work:215-575-1819 x-mozilla-html:TRUE org:Fannie Mae;Housing and Community Development, Northeast Regional Office (NERO) version:2.1 email;internet:[EMAIL PROTECTED] title:Senior Affordable Housing Business Manager note:If you need to reach me during non-business hours, send an email to: [EMAIL PROTECTED] adr;quoted-printable:;;1900 Market Street=0D=0ASuite 800;Philadelphia;PA;19103;U.S.A. fn:Edward J. Dodson end:vcard
