Your Money: Home-equity loans tougher to get

— -- Back when the real estate market was flying at 30,000 feet, getting a home-equity line of credit was a pretty straightforward process. You called a toll-free number, asked for a loan, and within hours, a guy with a suitcase full of money showed up at your door.

It's a lot harder now. Some lenders have stopped offering home-equity lines of credit and home-equity loans altogether, even to borrowers with good credit. And lenders that still offer the loans are being a lot more selective.

The lenders that have cut back on home-equity loans and credit lines are mainly those that raise money by selling the loans to investors. Investors have stopped buying such mortgages since the subprime market collapsed, says Bob Walters, chief economist for Quicken Loans, which has stopped offering home-equity loans or lines of credit.

Walters says investors have backed away from second mortgages for the same reason they've abandoned jumbo mortgages (those that exceed $417,000). Because investment mortgage giants Freddie Mac and Fannie Mae won't buy jumbos or second mortgages, these loans are considered riskier than so-called conforming loans.

But just as community and national banks are offering jumbo loans, many banks, savings and loans and credit unions are still providing home-equity loans and credit lines, says Keith Gumbinger, vice president for HSH Associates, a publisher of mortgage information.

These lenders typically use customer deposits to finance loans, so they're not beholden to Wall Street, he says.

Still, these lenders are unwilling to take big risks with their money, especially in this environment. The Federal Deposit Insurance Corp. said last week that delinquent home-equity lines of credit — those late by 90 days or more — jumped 16.6% in the second quarter.

Pava Leyrer, a mortgage broker in Grandville, Mich., says she's been able to find home-equity lines of credit for clients with good credit histories who can show they have sufficient income to make payments.