[9YearLurker]

Yep. And when you did make a down payment, it couldn’t come from a ‘piggyback loan’.

Even if Wall Street hadn’t sometimes been lax in slicing and dicing mortgage-backed securities, there’d still be a lot of bad mortgages out there—looking to roost somewhere.

[longtermmemmory]

PRE-2005 the risk of over inflating collateral could be washed out via lien stripping of the under collateralized portion of a loan.

This lead to valuation fights with mortgage lenders.

After 2005 the bankrupcy law erased the undercollateralized risk. Essentially they held the primary residence via threat of homelessness.

[rodguy911]

Exactly, its hard to change the basics of equity without someone paying the price, things don't go up forever. Sooner or later they go down.