MORE CREDIT PROBLEMS...

First, people with home equity lines of credit have been defaulting at a high rate:

Consumer delinquencies up in first quarter: ABA
Housing weakness adds to woes with equity lines of credit
By Ruth Mantell, MarketWatch
Last update: 11:30 a.m. EDT July 2, 2008

WASHINGTON (MarketWatch) -- Delinquency rates for home-equity lines of credit and bank cards rose during the first quarter, the American Bankers Association reported Wednesday, citing ongoing stress in the nation's housing market as well as general economic weakness.

On a seasonally adjusted basis, the percentage of HELOC accounts more than 30 days past due rose to 1.1%, up 0.14 of a percentage point, reaching the highest rate since 1997.

As a result of this and the decline in house prices, banks have been freezing already established lines of credit, to the dismay of people who had them:

Freeze tag
Five tips for borrowers who find their HELOC has been reduced
By Amy Hoak, MarketWatch
Last update: 5:27 p.m. EDT July 1, 2008

As lenders recoil in an environment of falling home prices and mortgage defaults, many have been reeling in lines of credit or freezing them outright.

Lenders say they're reducing existing HELOCs in markets that have been experiencing significant declines in property values.

This certainly won't help the broader economy.