A sharp rise in tax-deductible home-equity and second-mortgage
loans has contributed to a dramatic decline in the equity that
Americans hold in their homes, as the charts above show. Indeed,
the equity held by homeowners fell 15.7% in 1990, the steepest drop
in at least 45 years. Alarmed by this trend and by the extent to
which consumers are using home-equity loans for purposes such as
vacations and car purchases, Congress has asked the General
Accounting Office to investigate equity borrowing. Depending on the
GAO's report, expected in three months, Capitol Hill may curb the tax
advantages of these lines of credit.

BOX: COMMON INDEXES FOR ARMs

One-year Treasury constant maturity 6.31%
11th District cost of funds 7.16
National mortgage contract rate 9.12

Note: Averages are for July, June and July, respectively. Source:
HSH Associates. For the latest information on mortgage rates in your
area, plus a kit that will help you select the right loan, call
toll-free for MONEY Magazine's Mortgage Match at 800-243-8474. Cost:
$29.95

CHART: NOT AVAILABLE

CHART: NOT AVAILABLE
CREDIT: Source: HSH Associates
CAPTION: LEADING RATES IN THE 24 LARGEST METRO AREAS

CHART: NOT AVAILABLE
CREDIT: Source: HSH Associates
CAPTION: LEADING FIXED RATES IN THE 24 LARGEST METRO AREAS

CHART: NOT AVAILABLE
CREDIT: Source: HSH Associates
CAPTION: LEADING ARMs IN THE 24 LARGEST METRO AREAS

HOLE YARDS PAR R1 R2 R3 R4
OUT
HOLE YARDS PAR R1 R2 R3 R4
IN
Eagle (-2)
Birdie (-1)
Bogey (+1)
Double Bogey (+2)