If I were a lender. I would take this as a sign the judicial system is not going to let me recoup the money I loaned, at least that part of it I could call a profit. This being the case, I’d make damn sure I bled the new mortgagees dry of all their liquid cash in the closing (i.e., no more rolling closing costs and fees into the loan)..
Either that or I’d find a new lending line of business floating markers on the Vegas strip with my new business partners, Vinny and Guido......
The current system was considered a fantastically generous innovation at the time it was created. Earlier the home was part of the bankruptcy and they could toss you into the street quite easily.
Apparantly ACORN and the Obamaistas want to roll back the current system and allow judges to consider the status of the residence in bankruptcy proceedings.
I suspect they haven't thought this out all that carefully.
And 40% down to make sure the borrower has "some skin in the game".