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Mortgaging The American Dream: A Critical Evaluation Of The Federal Government's Promotion Of Home Equity Financing, Julia Patterson Forrester Rogers

Faculty Journal Articles and Book Chapters

In this Article, I advocate elimination of federal promotion of home equity financing, recommending that the federal government permit home equity financing without encouraging it. In Part Il of this Article, I discuss some of the problems caused by federal promotion of home equity financing. While home equity loans carry a risk to the borrowers of losing their homes, homeowners cannot properly assess this risk due to their tendency to underestimate the probability of default and foreclosure. Homeowners who do lose their homes to foreclosure may be devastated, both financially and psychologically. Despite the risks of a home equity loan, …