• The New York Times , Friday, August 15, 2008 10:15 AM

Lenders have spent billions of dollars in advertising to change the language of home loans and with it Americans' attitudes toward debt. Not long ago, "home equity" loans were known as second mortgages and were considered the borrowing of last resort, to be avoided by all but people in dire financial straits. Today, these loans have become universally accepted, their image transformed by ubiquitous ad campaigns from banks.

"Calling it a 'second mortgage,' that's like hocking your house," says Pei-Yuan Chia, a former vice chairman at Citicorp who oversaw the bank's consumer business in the 1980s and 1990s. "But call it 'equity access,' and it sounds more innocent."

Advertising historians look back at the '80s as the time when bank marketing came into its own. Citigroup led the way by hiring away advertising staff from packaged goods companies like General Mills and General Foods, where catchy ads were more common. Since the early 1980s, the value of home equity loans outstanding has ballooned to more than $1 trillion from $1 billion, and nearly a quarter of Americans with first mortgages have them.

Read the whole story at The New York Times »