House as ATM

Haven't visited IrvineHousing in a while, but Atrios pointed out this doozy:

• The house was purchased on 2/6/1998 for $183,000. There was a $173,500 first mortgage and a $9,500 downpayment.
• On 8/21/2002 they refinanced the first mortgage for $165,500. They actually paid down their debt.
• On 3/12/2003 they opened a HELOC for $50,000, just in case... Their first taste of kool aid.
• On 2/13/2004 they opened a HELOC for $226,000. The kool aid is flowing now.
• On 10/22/2004 they opened an Option ARM for $492,000.
• On 5/2/2005 they opened a HELOC for $75,100.
• On 10/21/2005 they opened a HELOC for $126,000.
• On 9/28/2006 they opened a HELOC for $150,000.
• Total debt on the property, $642,000 plus accumulated negative amortization.
• Total mortgage equity withdrawal, $468,500 including their tiny downpayment.

I do not have sympathy for this person, Really. But, with all this bailout talk in the news, the blame is 90% on the lenders. Back when people actually acted as loan officers, this wouldn't happen.