Posted by
Zekiahloanz on Friday, March 16, 2007 9:31:24 AM
Mortgage companies like New Century, Peoples etc... just got greedy. I've been doing this long enough to remember when 80% was the Maginot line. You could do anything you wanted with a deal if it was 80% or below. When you went above it, underwriters got scared, and rightfully so.
Then 85% was just a little above 80 and it wasn't that big of a deal to do an exception here or there to skew underwriting guidelines, besides we need the volume and Argent or whomever this month is killing us. We need the market share. Suddenly, 90% was the line that shouldn't be crossed and then we threw in an occasional 2 or 3% that no one ever noticed. As if that wasn't bad enough, the 80/20 was created and it was off to the races to see who could bastardize the product just a little more. Could we do it with an interest only? Could there be mortgage lates? Could we do it with a lower score? Let's go to 560. Mommy, everybody else is doing it, why can't I. And we did. And the industry is paying the price.