Equifax, Fitch sound alarm on looming home equity credit line resets

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Resets on home equity credit lines opened up during the housing boom represent a looming “wave of disaster” because many borrowers will be unable to handle the higher payments or refinance their debt, forcing banks to either foreclose or modify their loans, Equifax Chief Economist Amy Crews Cutts tells syndicated columnist Ken Harney.

Fitch Ratings is also warning that resets on home equity credit lines pose an “increasing credit risk” to banks next year and beyond, Harney reports. Federal financial regulators think about $30 billion in home equity lines will reset next year, rising to $53 billion in 2015 and $111 billion in 2018. Source: courant.com