How $1 Billion in Advertising Lured Americans into Tapping Their Home Equity

As one of the ads proclaimed: “There’s got to be at least $25,000 hidden in your house. We can help you find it.”

From the early 1980s to the late 1990s, home equity in the United States grew from around $1 billion to $1 trillion. All Citi and others needed to do, with the help of ad agencies, was change the way homeowners viewed this equity.

So instead of calling it a "second mortgage" on your house -- which it really is -- they rebranded it as a HELOC and convinced customers to tap into it to pay for remodeling, college for the kids, new cars and that European vacation they always wanted.

The higher fees for HELOCs resulted in a 25% to 50% higher return for banks than other consumer loans. Check out the article for images of the most egregious ads. It's guaranteed to make you cringe.

Posted by Suzanne Morris of Ideal Investment