But it's another data point that needs to be considered when evaluating the good and bad of homeownership.

I understand the problem you're trying to solve, but the way you're trying to solve it is wrong-headed. In finance, we call it "leverage" and it isn't a bad thing - it demonstrates how much of your stake is on the line vs. how much is other people's risk. We talk of "highly leveraged businesses" but home owners are debtors, despite the fact that their transactions are much more secure and much better backed.

The data agrees with you:

AT: Sure. A number of groups, President Bush included, have advocated increasing homeownership. That's a great goal, to be sure, and these groups have good intentions. The problem is that they usually advocate waiving downpayments, or subsidizing downpayments for people who can't afford to put up the money up front. Unfortunately, a family that doesn't the financial resources to put together a downpayment on their own, is 15-20 times more likely to lose the home on foreclosure. Let's face it, if you haven't been able to save up some money for a downpayment, it's a sign that your income is too erratic or your expenses are already too high, and you can't afford that house right now.

The second problem is that mortgage companies will charge these low-income homeowners a much higher rate, because they view them as a higher risk -- the banks know full well they're 20 times more likely to get foreclosed on. So they're paying more for the same product.

The basic issue is that housing is not affordable, people are barely making ends meet, and for the past 80 years our government has based advancement on property ownership. The hardest thing is to bring property values in line with wages. The easiest thing is to waive equity requirements. So we do the easiest thing.

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).

The sane part of you recognizes that this problem could be simply solved by limiting predatory lending practices.

We got a flyer in the mail the other day. It offered a $100k line of credit on our house, no questions asked, pre-approved. This differed radically from the line of credit we actually applied for from our credit union, who were willing to extend us a HELOC only on the equity we actually had in the house, and only for two years, and only at 7%. The bank-by-mail didn't disclose interest or anything else, of course, and had done no due diligence. The credit union required us to pay to have an approved assessor come out.

The truly appalling thing is that the bank-by-mail offer wasn't even to us. It wasn't even to our last tenant. It was to a guy who lived here in 2011 and moved out in 2012.