I am constantly surpised and a little sickened by the number of adjustable loans out there with huge jumps in payments, negative amortization, and other wonderful "features."

In a normal credit market, you need 10% or 25% down payment and the lender looks at your credit and employment very carefully.

In normal times there is no such thing as a loan to someone with bad credit and no equity.

A lot of these loans were stated income loans. To stop foreclosure refinancing adjustable loans is not the answer because that money has evaporated and in my opinion isn't coming back.

 

Stated income loans are not really there, unless your FICO score is over 680.

The standard measure of equity is loan-to-value ratio. 100% would be a $100,000 loan on a $100,000 house. An 80% LTV would be an$80,000 loan on the $100,000 house.

80% - 95% loan-to-value second mortgages can be done if today only if you have excellent credit and good proven income. As far as first mortgages, the lenders want to see good equity and good credit.

A lot of people in foreclosure are better off doing a short sale and getting out with credit intact compared to a foreclosure. If you go into foreclosure and lose the house there isn't much you can do with your credit. And you face other unhappy decisions. A voluntary sale is better.

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