Excerpt from article…
Cheap credit has fostered another development that was crucial in creating the current state of things: It unleashed a wave of mortgages with exotically lenient terms, such as interest-only payments and no money down. That allowed buyers to take on more expensive homes than they could have otherwise afforded. As home values rose much the way dot-com stocks had a decade earlier, banks offered loans and no-fuss refinancing that allowed homeowners to turn increased value into money. From 2004 to 2006, Americans took more than $800 billion a year out of their homes, according to most estimates.

With prices now plummeting and banks savaged by mortgage losses, this artery of credit is drying up. The American consumer, a crucial engine of growth for the global economy, may finally be tapped out.

http://www.nytimes.com/2007/11/25/weekinreview/
25goodman.html?_r=1&oref=slogin