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To: rodguy911

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.


59 posted on 09/21/2008 6:19:52 AM PDT by 9YearLurker
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To: 9YearLurker

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.


63 posted on 09/21/2008 6:22:45 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: 9YearLurker
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.
86 posted on 09/21/2008 6:37:57 AM PDT by rodguy911 (HOME OF THE FREE BECAUSE OF THE BRAVE--GO SARAHCUDA !!)
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