By Nick Timiraos
The conventional wisdom of the housing crisis goes something like this: Too many people bought homes as the housing bubble inflated. Some were unlucky in their timing, while others overextended themselves by putting too little money down. All of these top-of-the-market purchases led to an explosion of foreclosures once home prices dropped sharply and the economy hit the skids.
Nonetheless, why did so many people who bought their homes before the housing bubble fully inflated end up losing their homes anyway?
The answer: These homeowners aggressively used their homes as ATMs, extracting cash by refinancing into larger loans or using home-equity loans.
Read full article: http://blogs.wsj.com/developments/2013/05/28/study-how-using-homes-as-atms-fueled-foreclosures/
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