Buyers beware: banks still offering home equity loans during bad economy

From how I view recent economic news, it appears that banks are able to get money cheap, but many consumers should still beware! Some banks are not doing any car loans, but are instead trying to squeeze what little equity a homeowner may still have from his home investment by making 3.3% interest loans that can be used to purchase a car, make home improvements, etc.

Not only is the bank still making a lot of money off these types of loans, but they still basically own the home should the borrower default or go bankrupt.

According to the Federal Trade Commission, "... if you agree to a loan that's based on the equity you have in your home, you may be putting your most valuable asset at risk. Homeowners-particularly elderly, minority and those with low incomes or poor credit-should be careful when borrowing money based on their home equity. Why? Certain abusive or exploitative lenders target these borrowers, who unwittingly may be putting their home on the line. Abusive lending practices range from equity stripping and loan flipping to hiding loan terms and packing a loan with extra charges. The Federal Trade Commission urges you to be aware of these loan practices to avoid losing your home."

©2011 Tomi Johnson. All rights reserved.