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To: longtermmemmory

Yes, but the piggybacking did something else.

Part of the idea of the down payment was to assure that the lender had something worthwhile under their loan. But the other part of it was to make it unlikely that the borrower would end up underwater at any point during the loan. HELOC’s eroded this additional source of stability.


68 posted on 09/21/2008 6:27:40 AM PDT by 9YearLurker
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To: 9YearLurker

hence the post 2005 incentive to mega inflate the value.

banks could then do 100% loans and the borrower could second mortgage the down payement.


90 posted on 09/21/2008 6:40:28 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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