How do banks loan more money on a place than it is worth?
The same way brokers will cover your losses if you invest in cattle futures-- see how Hillary Clinton turned a $1000 investment into a $99K profit when her trophy husband was governor of Arkansas.
I remember loans on a home (for ANYBODY, actually) that were over 125% of value. I saw several of them in my subdivision.
A couple would get the house and cash (no money down, no closing costs) buy the house and make a down payment on a new car. They’d get friends as roommates and charge ‘rent’.
It never worked out. Less than a year. They walked away from the house and somebody else came along and did the same thing until the bubble burst.
The house across the street from me was one. 5 owners in less than 10 years. Mostly users, losers and cruisers.
The couple in there now (sixth) have been there the longest. They too fell under Obama’s darkness and both lost their jobs. I’ll give them this. BOTH got jobs that paid far below their last ones. They’re still there and crawling back to normalcy, even under Obama. I hope they survive. They work at even the lowest jobs to get by. God bless them.