Possible Problems With `A’ Quality Mortgage Borrowers
August 10, 2007
There have been recent reports from major lenders that significant payment problems are being experienced by borrowers of “A” quality mortgages, in addition to the subprime loans. However, it’s seldom noted that in many cases where high creditworthy borrowers are encountering problems it’s a second mortgage that creates the problem – originated in “piggyback” mortgage transactions.
This is a way many borrowers acquire a home with minimal downpayment and escape paying for private mortgage insurance. They simply apply for two mortgages simultaneously, a first and second loan. With such small initial equity and with home values declining in some areas, it’s inevitable that some of these deals will result in delinquencies.
Posted in All Things San Diego, Helpful Hints, Lending, Local Business, Real Estate, Things of Interest
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