97%+ Loan-To-Value Mortgage Loans: It’s Deja Vu’ All Over Again!

By | December 7, 2015

Residential mortgage-backed securities (RMBS) stuffed with sub-prime “liar loans’ were at ground zero of the 2008 financial crisis and, guess what…

They’re Ba-ack!

Not stated loans per se but in a new program from Fannie Mae called HomeReady Mortgages, 97%-plus Loan-to-Value loans become possible ‘based not on the borrowers income (which is too low) but on “non-borrowers” like extended family or children!’

From Fannie Mae…

residential mortgage,mortgage underwriting,Fannie Mae,RMBS


The program is clearly summed-up in this excerpt from the website Zero Hedge

…So, to sum up – if you don’t have any savings, the government will give you some to use as a down-payment (which as long as you stay poor will be forgiven over time).. and then the government will allow you to borrow 97% of the value of the home on the basis not of your income and ability to pay but of any rag-tag bunch of friends, family, or pets you can gather under your ‘new’ roof… and all subsidized by the good ‘ol US Taxpayer… for your own good.

And why are they doing this? Aside from the obvious desperation to keep home prices higher via unsustainable demand? Simple… because it’s fair… it is everyone’s right – no matter how poor, how uncreditworthy, how under-employed, how much of a drag on the rest of society, or how ignorant – to leverage themselves (at the US taxpayer’s dime) at 30-40 to 1 into record high US home prices… as they explain themselves…

(Aligned with Fannie Mae’s regulatory housing goals and may help lenders meet applicable Community Reinvestment Act goals)

Common sense lending or ‘deja vu’ all over again’ through an invitation to revisit some the issues that are still being cleaned-up post-financial crisis? You make the call!

Michael Haltman is President of Hallmark Abstract Service in New York. He can be reached at mhaltman@hallmarkabstractllc.com.

2 thoughts on “97%+ Loan-To-Value Mortgage Loans: It’s Deja Vu’ All Over Again!

  1. Pingback: Forget FICO Scores? ‘Homeownership is an integral part of the American Dream’! | Hallmark Abstract LLC

  2. Pingback: Subprime Mortgages – They’re Ba-ack! | Hallmark Abstract LLC

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