By Diana Olick | CNBC
The pain of all that overstretching during the last housing boom isn’t over yet.
Home equity lines of credit (HELOC), which are usually second loans after the primary mortgage, were incredibly popular between 2005 and 2008. They allowed homeowners to use their properties like an ATM. After ten years, however, they turn into pumpkins: the initial low interest rates can reset to higher interest rates, and borrowers are no longer allowed to draw funds from the credit lines. On top of that, borrowers must begin paying down the loan principal.
