Count on someone in the mortgage business to start this perilous week with a pitch for bigger mortgages.

You read that right: Bigger mortgages.

After everything that's happened in the past year—to the mortgage industry, to the hapless millions who gorged on home debt and are now cash-starved renters, to real-estate prices, to Wall Street, to the limping economy in general—who would suggest homeowners go out and borrow more from their homes?

Gibran Nicholas, Chairman of the CMPS Institute, for one. The Ann Arbor, Mich. organization, which certifies mortgage bankers and brokers, suggests folks stop pre-paying their mortgages, max out their home-equity lines of credit, and in fact get a home mortgage if they don't already have one.

“Cash is king in a liquidity crunch,” said Nicholas in a press release sent today. “The worst thing you can do in this environment is dump more of your cash into your home equity because you may not be able to get access to it if you run into financial difficulties, if the housing market continues to decline, or if the credit crunch gets worse.  Although it sounds counter-intuitive, you should have as big a mortgage as possible—even if you don’t need it—and leave as much cash as possible in a safe, liquid place that is readily available to you. This empowers you to weather the storm and also have your funds available to take advantage of bargain opportunities that are becoming available because others have not followed this advice. In this environment, the one with the most cash wins.”

OK, we agree that having an insured, emergency account is very important. And perhaps you could redirect a mortgage prepayment into a cash account. Nicholas recommends checking to make sure all your investment and bank accounts are covered by insurance, which is always good advice.

But borrowing more? We don't think so.

Getting a primary mortgage is expensive. The points, origination fees, title insurance costs, filing fees, and many other costs can add up quickly into the thousands of dollars.

Plus, you are bound to pay that mortgage back, with interest. Unless the interest rate you're making on the cash you've taken out of your home is greater than the interest rate of your mortgage, you'll end up spending more by having the mortgage, even given the tax benefits. According to Bankrate.com, the average interest rate on a fixed, 30-year mortgage is 5.78 percent; the average rate for a 1-year certificate of deposit is 3.69 percent. It's 3.17 percent on a 6-month CD, and 2.39 percent on a money market account of greater than $10,000.

Borrowing on a home-equity line of credit is less expensive now than it's been in the past—the national average is about 5 percent for $50,000 borrowed, Bankrate says. But that's still more expensive that what you'll make in any super-safe cash accounts. If interest rates go up, that HELOC floating rate could rise to drown you.  And if you don't need all the money now, why pay all that interest on it?

Most important, if your job or regular income should shrink or evaporate, you could be in the same position as all those millions of former homeowners. Debt is debt. You owe it regardless of what's happening to your income. Millions of Americans learned that the hard way.

Yes, cash is king. Budget to put away a portion of your earnings each week or month in an insured account, and keep it there for emergencies. Ideally, you should stockpile 3 to 6 months of expenses. But please, don't get into more debt unless you are absolutely sure  you can pay it back.—Tobie Stanger