Home prices have not recovered enough to protect the states with high concentrations of home equity lines of credit whose rates are scheduled to reset in the next few years.
Forty percent of these HELOCs were seriously underwater in 2014, and this year more than half of these loans will have loan-to-value ratios of 125% or more, according to RealtyTrac. When homeowners owe more than their homes are worth, they are more likely to default, particularly if their monthly bill spikes, all other things being equal.
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