From the WSJ: Home Equity Loans Come Back to Haunt Borrowers, Banks
More homeowners are missing payments on their home-equity lines of credit, or Helocs … These loans typically require interest-only payments for the first 10 years, but then principal payments kick in for the next 15 or 20 years.
The increased cost of the loan can become a strain for some borrowers. This is becoming an issue now because many borrowers signed up for Helocs in the run-up to the housing bust as home values kept rising. Roughly 840,000 Helocs taken out in 2006 are resetting this year, with principal payments on an additional nearly one million loans expected to hit in 2017.
This isn’t a large concern for the economy. But the ripples from the housing bubble are still being felt.
• At 8:30 AM ET, Retail sales for July will be released. The consensus is for retail sales to increase 0.4% in July.
• Also at 8:30 AM, The Producer Price Index for July from the BLS. The consensus is for a 0.1% increase in prices, and a 0.2% increase in core PPI.
• At 10:00 AM, Manufacturing and Trade: Inventories and Sales (business inventories) report for June. The consensus is for a 0.1% increase in inventories.
• Also at 10:00 AM, University of Michigan’s Consumer sentiment index (preliminary for August). The consensus is for a reading of 91.0, up from 90.0 in July.