[E. Pluribus Unum]

The risk of default is inversely proportional to the size of the down payment.

Period.

If you get something for nothing down, you lose nothing if you walk away.

And speaking of default rates, blacks have a much higher default rate than other categories of borrowers, meaning that they were not being held to a higher standard, they were being held to a lower standard.

[Hemingway's Ghost]

If you get something for nothing down, you lose nothing if you walk away.

. . . except for what you paid up each month until you walk away.

[TruthConquers]

“If you get something for nothing down, you lose nothing if you walk away.”

From the banks perspective, this is no longer true.

They make money when these loans fail, in fact they make MORE money when these loans fail. They made fancy bets called CDS that they structured to make money when the loans fail. They have made more money doing this than in their lending.

They must want another round of fools to keep the credit bubble going and make more money on the taxpayer dime.