Enjoy that HELOC before its gone

Interesting article in the Washington Post called Homeowners Losing Equity Lines. The author discusses the issues of banks shutting down HELOC's due to lowering house values. Here is one key section -

Last year, 34 percent of borrowers said they used their home equity lines to pay off other debt and 29 percent used them for home renovation, according to a survey of lenders by BenchMark Consulting International. Another 31 percent used them to pay for other things, such as medical bills, weddings or vacations.

I wonder how much of that debt and "other things" involved everyday living that should come out of income not the value of your house or your potential future. Aside from medical bills and possibly renovation - especially emergency renovation due to furnace breaking down or other known but unexpected or unplanned event - all of this debt can be avoided. If you can't afford to go to Hawaii on your everyday salary don't go! If you can't afford a $100,000 wedding than don't have one!

Another interesting part of the article is the case of the Corazzi family. They took at a $95,000 home equity line in Oct. due to fears about her job. Her pay was changed in Dec. from salary to commission and now she has only received 1 paycheck. We are told how the family need's their home equity to pay for preschool. With $45,000 left in the line they were told that their credit line was closed due to the declining value of their home. So in 2-1/2 months they spent $50,000 on pre-school?!? (Note to self - set up a preschool for the Corazzi family.) And was her salary over $200,000? That's alot for living in a $560,000 home. They thought in Oct. they her job was in jeopardy so instead of changing lifestyles they borrowed against the house. Also, she worked in the mortgage industry and did not notice that home prices were falling?!? This is a clear case of people using their house as a second income - a high paying second income.