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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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.