[onewhippedpuppy]

Originally Posted by aigel

Banks curretly also close or reduce home equity line of credits. Even borrowing against a 401k isn't going to bring the funds it used to!

This is a very bad spiral. Businesses will suffer, putting more people out of work. The people out of a job can't borrow from credit cards or HELOC. They likely will have trouble paying their mortgage, even if their house isn't under water. This will further send house prices down ... you get the picture ...

George

Remember when people actually paid for things? Like, with money? Lenders being more conservative is not a bad thing, it's the slap in the face that many Americans need. Returning to conservative (i.e. smart) lending practices is better for everyone, except those that are mortgaged to within an inch of their lives. Our addiction to debt has to stop, but no matter how you cut it things will be ugly for a while.