[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-321447-105":59,"doc-detail-321447-en":130},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":123,"head_meta":125,"extra_data":127,"updated_unix":129},105,"en","economic-commentary-what-are-hels","Economic Commentary - What Are HELs?","","Economic Commentary analyzes rising signals of consumer financial distress, including growth in consumer installment debt relative to disposable income, increasing delinquency rates on installment and mortgage debt, and a sharp rise in personal bankruptcies. Against this risky backdrop for consumer lending, it explains how home equity lines of credit (HELs) expand borrowing opportunities, why HELs are popular, and what characteristics and consequences shape consumer borrowing and potential economic effects.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/economic-commentary-what-are-hels/321447/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/economic-commentary-what-are-hels/321447.png","ImageObject",300,407,{"name":92,"@type":93},"Ava Thompson","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-09-23","2026-09-21",true,{"@type":102,"interactionType":103,"userInteractionCount":81},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"What consumer distress indicators are highlighted in the commentary?","Question",{"text":112,"@type":113},"The commentary cites rising consumer installment debt relative to disposable personal income, increasing delinquency rates on installment and mortgage debt, and a large increase in personal bankruptcies.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"What exactly are home equity lines of credit (HELs)?",{"text":117,"@type":113},"HELs are mortgages secured by real estate, typically a first home, structured as prearranged revolving credit lines that can be drawn down and repaid repeatedly until maturity.",{"name":119,"@type":110,"acceptedAnswer":120},"Why have HELs become so popular for consumers?",{"text":121,"@type":113},"The commentary points to the Tax Reform Act of 1986, which phases out deductibility of interest on non-mortgage consumer debt by 1991 while keeping interest on qualified debt secured by first and second homes deductible under certain limits.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},321447,1790013444,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":81,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":24,"language":139,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":140,"faqs":141,"seo_title":142,"seo_description":67,"update_tm":143,"read_time":144},1649267921044,"https://us-avatar.wpscdn.com/avatar/1800007509477c92dfb?_k=1786009248482753345","ECONOMICCOMMENTARY  \nThree traditional indicators of consumerfinancial distress have sent up warningflags in the past year.The rapidgrowth of consumer installment debtrelative to that of disposable personalincome pushed the debt-to-income ratioto new highs in 1986;delinquency rateson installment and mortgage debt con-tinued to increase last year;and per-sonal bankruptcies grew about 30 per-cent to reach a record high.  \nAgainst this apparently risky back-ground for consumerlending,consum-ers are being offered additional borrow-ing opportunities.Many lenders aregiving consumers credit lines of manythousands of dollars based on theequity in their homes.Available evi-dence suggests that consumers areacquiring these home equity lines(HELs)in great numbers.  \nWhat are HELs?Why are they so popu-lar?What is their probable impact onthe quantity of consumer borrowing andon the economy?This Economic Com-mentary attempts to answer thesequestions.  \n# What Are HELs?\n\nHELs are basically mortgages becausethey are collateralized with real estate,typically a first home.Like traditionalmortgages,HELs place liens on thehome.Unlike traditional mortgages,HELs are prearranged and revolvingcredit lines that may be accessed bycheck,telephone transfer,or creditcard,depending on the lender.The  \nHEL credit line can be drawn down atany time and for any reason,and as theHEL principal is repaid,it can be bor-rowed again until the maturity date ofthe HEL is reached.Usually,there is aminimum amount for withdrawals.  \nHEL pricing varies considerablyamong lenders.Interest rates on HELsare almost always variable,and maychange monthly or even more fre-quently without an upper limit or ceil-ing.There also may be a floor belowwhich contracted HEL rates cannotfall.Most lenders use their prime rateor The Wall Street Journal prime,plusone to three points.Some lenders addpoints to a U.S.Treasury bill interestrate or to some average of that rate.Inmany cases,the point spread abovethese base rates depends on the amountof the HEL credit line,with smallerspreads for larger credit lines,as is truein commercial lending.  \nAs with first and second mortgages,appraisal and other closing costs forHELs are assessed,though many lend-ers waived these costs in late 1986 andearly 1987 for competitive reasons.It isimportant to note that these fees arebased on the size of the credit line evenif the full credit line is never borrowed.An annual fee of about $30 also isrequired by most lenders.  \nThe maximum amount of a HELcredit line may be limited to typically75 to 85 percent of the equity(marketvalue minus outstanding mortgagedebt)in the home or,more restrictively,to 75 to 85 percent of the home'smarket value minus the outstandingmortgage debt.Unlike most credit  \nThe views stated herein are those of the authorand not necessarily those of the Federal ReserveBank of Cleveland or of the Board of Governors ofthe Federal Reserve System.  \nJune 1,1987  \n# Home Equity Lines:Characteristics andConsequences\n\nby K.J.Kowalewski  \ncards,HELs have a fixed maturity,or amaximum amount of time consumerscan take to repay the balance,whichtypically varies between 10 and 20years.There are no penalties for earlyrepayment of the HEL.  \nPrincipal and interest can be repaidin one of two ways,depending on thelender.Fixed-percentage HELs calcu-late minimum monthly payments as apercentage,usually between 2 and 5percent,of the outstanding principal.Interest-only HELs require only inter-est payments for the duration of theloan and one principal payment or “bal-loon\"when the loan matures.Theadvantages of balloon HELs are greaterinterest deductions over the life of theloan and lower monthly payments.Onthe other hand,balloon HELS imply agreater risk that the consumer will beunable to repay the balloon when theloan matures.  \nIt is also possible that the fixed-percentage HEL will not be completelyrepaid at maturity,either because alarge loan was taken out near thematurity date or because interest ratesrose to hig","cbCailfd2CCmQ2FS","https://ap.wps.com/l/cbCailfd2CCmQ2FS","pdf",1528182,"English","# What Are HELs?\n## Home Equity Lines:Characteristics and Consequences\n# Why Are HELs So Popular?","[{\"question\":\"What consumer distress indicators are highlighted in the commentary?\",\"answer\":\"The commentary cites rising consumer installment debt relative to disposable personal income, increasing delinquency rates on installment and mortgage debt, and a large increase in personal bankruptcies.\"},{\"question\":\"What exactly are home equity lines of credit (HELs)?\",\"answer\":\"HELs are mortgages secured by real estate, typically a first home, structured as prearranged revolving credit lines that can be drawn down and repaid repeatedly until maturity.\"},{\"question\":\"Why have HELs become so popular for consumers?\",\"answer\":\"The commentary points to the Tax Reform Act of 1986, which phases out deductibility of interest on non-mortgage consumer debt by 1991 while keeping interest on qualified debt secured by first and second homes deductible under certain limits.\"}]","Economic Commentary - What Are HELs? | PDF",1789959337,13]