
The shift to mortgages based on rising property values gets reflected in consumer loans which declined about one percent to 704.7 billion dollars by the end of April 2005 from their record level of 711.4 billion reached a month earlier. This trend can be expected to accelerate once banks tighten their lending practice more after there have been reports that loan criteria have been getting handled quite lax recently. Consumers are also taking advantage of still very low mortgage rates which have encouraged them to refinance their consumer loans pawning their houses to ever bigger extents, raising the possible severe consequences to their own financial stability when the red-hot housing market begins to cool.

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