H-Rookie, You Bring Up Some Interesting Points - Posted by Vic
Posted by Vic on February 11, 2001 at 02:09:21:
You bring up some interesting points that I hadn’t even thought of.
Namely, will it be a second mtg or part of the first?
You’re also right about the human factor. I mean most people with common sense know that if the credit’s there, like it will be here, that people are going to use it. I wonder how long it would be before the banks have to discontinue these programs because of all the money they’ll be losing on the foreclosures.
Also, if a bank is willing to loan up to 100% of the value of the house, why don’t they just issue a 100% loan on just the value of the house only? I imagine it’s because they can get more interest on that second (if that’s what it will be).
I can just see the lawyers lining up now for the class action lawsuits alleging that the banks are at fault because they made the credit too easy for the buyers, who can’t protect themselves from themselves. You know it would never be the buyer’s fault, only the banks.
Another point to consider too is what happens when the value of the house goes down 10%. Now the bank has a 110% loan. How many of them can you foreclose on before going out of business?
You’re right there are so many questions to be answered. It’ll be interesting to see how it plays out.