The self-contradictory statement of the day:
“As long as the housing bubble doesn’t burst, home equity lines should remain strong and remain safe,” said Scott Stern, chief executive of Lenders One, a St. Louis-based cooperative of 60 mortgage companies that originate home-equity lines, including some that feature 100 percent loan-to-equity ratios. “As long as the bubble doesn’t burst, there should be no serious problem.”
I think that this statement is meant to be reasssuring… but for the life of me I can’t figure out why. If lenders feel that the loans that they are making are safe only so long as a “housing bubble” continues, then I wonder exactly what they think a bubble is. Or alternatively, what they mean by “strong and safe”.