A growing number of homeowners who used their homes like ATMs are beginning to suffer withdrawal symptoms.

They can't afford to pay their home equity loans.

The same interest rate resets that have ripped through the subprime market are also becoming a pain in pockets of homeowners with home equity loans.

Three of the nation's largest banks -- Citigroup, Wells Fargo and JP Morgan Chase -- all reported reduced fourth quarter earnings tied to trouble in the 850 billion dollar home equity market.

In the third quarter of 2007, the 15 billion dollars in delinquent home equity loans was the highest level in a decade, according to Moody's U.S. Home Equity Index.

For too many homeowners home equity use has gotten out of hand.

Home equity is the difference between your mortgage balance and the value of your home. Lenders allow you to borrow money against some of that equity.

During the housing boom, home values skyrocketed, creating a sudden "wealth effect" and homeowners cashed in their home equity bonus.

Some of them went too far.

Smart homeowners used home equity money to fund what financial experts consider safe bets -- business start-ups, home improvements and college education.

Other homeowners splurged on vacations, big cars and home theaters -- items that don't give you a return on your money.

Homeowners having the toughest time are those who combined an adjustable rate first mortgage with an adjustable rate home equity loan in a so-called "piggy-back" mortgage deal. Piggy-back mortgages are used to finance the full value of a home.

Piggyback mortgage homeowners now have two mortgages, interest rates have risen on both loans and monthly mortgage payments have become unaffordable.

In today's soft housing market, with flat and falling home prices, there's little if any home equity growth to bail them out.

Published: January 22, 2008

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.