Home-equity loans may be the next thing to fall as borrowers are struggling to pay off their mortgages and credit card bills. As a result, banks are set to lose billions more as a result of increases in loan loss provisions as borrowers continue to default on payments. Unfortunately, these lenders will not have any recourse as with mortgages since many of these loans are no longer secured by enough assets.

From the Wall Street Journal:
Here comes another headache for banks suffering from the mortgage downturn: Losses on home-equity loans are soaring, even at some lenders that avoided big blunders on subprime loans. When times were good, banks raked in billions of dollars in profit from home-equity loans, which allow borrowers to tap the accumulated value in their property with either a loan for a specific amount or a line of credit. As long as home prices were rising, lenders had little to worry about. But falling home values are leaving banks with little or nothing to collect on many home-equity loans in case of default. Some stretched borrowers are keeping up with their mortgage and credit cards -- but not their home-equity loan.