[JasonC]

Correct - except for the 20% down part. Only trade ups have that, from prior home equity from the exact same bubble. First time buyers never have 20% down, and haven't for 20 years. "But back in my day, when houses cost $8000" yeah pops, that ain't now.

[nicola_tesla]

That’s why PMI was invented - to insure banks against those who didn’t have the 20%. However, it is a significant extra cost to the borrower that had to be factored into the 36% of income to be sustainable.

The 20% or better was considered the safest type mortgage, ie property values cound depreciate 20% and the borrower would still be rightside up on the loan.

Banks forgot all that in their greed for the fees. And they were allowed to forget it because they securetized the loans and never intended to hold them to maturity.

Now ? The projection is over 50% of mortgages issued since 2004 will be upside down by this year, hence the “jingle mail”.