The HELOC Trap for Banks

It seems that banks are having a problem with 2nd mortgages and Home Equity Lines of Credit (HELOC).

Because these loans are 2nd in line after the initial mortgage, an increasing number of consumers are simply not paying. With their home under water, they know that a foreclosure on these loans will recover no money at all, so instead, they are paying the 1st mortgage and credit cards.

It is, for example, hitting JP Morgan, which did not do subprime lending to any large degree.