Via Peter Grant, I stumbled across this little gem from CNBC about how those poor/foolish homeowners aren’t taking out HELOCs. Don’t they know that home equity is supposed to be used to fuel consumerism.

For those unaware, Home Equity Lines of Credit are loans made against the portion of the home the owners have already paid off. They were advertised heavily in the early aughts for doing all sorts of things such as bill consolidating (taking out new debt to pay off old debt), doing remodeling on the house, sending kids to college, etc. Pretty much any big ticket item could be financed through a HELOC. After all, the housing market just kept going up.

Until it didn’t. And people were now underwater in their homes. With a variable interest rate HELOC. Many lost their homes. Some still haven’t recovered after a decade.

Now the housing market is heating up again, and the same damn fools are telling consumers that they should tap into their equity again. All that value tied up in real estate and houses instead of being used to take out loans. People just don’t understand how they could make their new home value work for them.

Or maybe the people are being smarter than the “experts”.