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"We had a push (for home equity lines of credit) around the holidays, hut not a blitz, by any means. The volume of loans has been pretty steady."
N. PALM BEACH, Fla. -'Twas the season for advertising home equity loans and lines of credit this past December, but those consumers who took out HELOCs did not use them to make their Christmases merry and bright.
Instead, practicality reigned as the primary reason for a bustling HELOC season. Customers used the money they borrowed for home improvements, mainly, followed by debt consolidation and vacations, bank officers said.
Holiday purchases were low on the list of reasons given for taking out the loans. Offers were everywhere, though, from First Chicago NBD to Bank United in Houston to Keybank in Cleveland.
In fact, a new push for HELOCs is under way currently at banks and financial institutions nationwide, in hopes of attracting those who may be in need of debt consolidation loans after the holidays.
"We ran a very successful campaign in November and December, and most of the HELOCs purchased were in the $30,000 range," said Monica Martines, vp-communications for $5.8-billion Third Federal Savings, Cleveland. "Our main use is for home improvement. That's what our customers tell us, and that has been our niche."
Third Federal is launching a new debt consolidation HELOC campaign this month, sending out direct mail timed to arrive with monthly bills. "This time of year, when all the holiday bills are rolling in, it should go well," Martines said.
At Sierra Schools Credit Union in Reno, Nev., president Ritch Van Duzer said most of his CU members use HELOCs to pay their taxes and for debt consolidation. Advertising is accomplished primarily through direct mail and newsletters.
"We don't think using the equity in your home for holiday purchases or other frivolous uses is very fiscally...