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Credit crunch

• Occurs when credit availability is so restricted that normal economic or financial activity is adversely impacted. It is a more extreme case of credit rationing which has tightened.

• If depositors in one location (say Michigan) cannot provide deposits to fund loans in another location (say California), many good loans may go unfunded. This is a credit crunch.

 
 

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Tips for Trying to Fix a Clogged or "Frozen" Home Equity Line: For years, homeowners have turned to home equity lines of credit (HELOCs) as a way to borrow against their home's value to pay for college tuition, home improvements, medical bills and other major expenses. (A home's equity is the market value minus what is owed on the mortgage. If you owe $100,000 on your mortgage but your home is worth $250,000, your equity is $150,000.) More...

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