By Kenneth Harney | The Washington Post Writers Group
It’s the emerging housing success story that almost nobody knows about: Hundreds of thousands of homeowners who took out record numbers of home equity lines of credit during the boom years of 2005-2008 are defying experts’ predictions of financial catastrophe.
How? By paying their debts. Rather than defaulting on their credit lines at the 10-year “end-of-draw” point when their required payments can abruptly jump by hundreds of dollars a month, the vast majority of owners are hanging in there, finding ways to stay current, often with the help of the banks who lent them the money.
Though Wall Street and credit industry analysts had warned of serious losses when hordes of housing-bubble borrowers hit the 10-year mark, beginning this year, the delinquency rates on these billions of dollars in equity lines are actually declining, not rising.
