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This law was passed after an earlier housing bubble which hurt homeowners badly. The law says homeowners can take loans on only 80% of the value of the home, and it bans home equity loans. Similar laws protecting homeowners could have reduced the size and impact of the housing bubble in the U.S. The failure to protect homeowners and its serious consequences for the economy is one of the major lessons of the housing bubble. Without the proper laws in place many things can and do go wrong.
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