Certainly not fair, because of the legal rights you cite. But it's another data point that needs to be considered when evaluating the good and bad of homeownership. Like all investments, there's a level of risk with buying a home that is often underweighted, because of all the good that it comes with. Home equity is actually rising in America, but unfortunately I think that isn't reflected too much in down market housing--the rich are still getting richer for the time being.
The radical part of me thinks that home equity loans should maybe not be illegal, but should be so strict in their distribution that you would need a really damn good reason for taking one (redoing the kitchen because it "adds value" not being one of those reasons).