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Return of the piggyback loan

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Mortgage Professional America | 05 Jul 2013, 07:00 AM Agree 0
Piggyback mortgages, which fell from favor during the housing downturn, are slowly making a comeback as home values start to pick up, several industry leaders have said
  • Jeb Koerber | | 05 Jul 2013, 09:23 AM Agree 0
    What lenders are making the piggyback seconds?
  • Wm Matz | | 05 Jul 2013, 11:19 AM Agree 0
    Wonderful comment by Bill Kidwell [there are few toxic products]. I have phrased it similarly, "There are no bad mortgage programs, only bad fits between borrowers and mortgage programs." This is a point that is completely lost on "reformers", who focus on eliminating programs that were pushed abusively by Wall St. due to high profitability. We all recognize that consumers are now worse off after reform with fewer choices.

    The far better approach is to leave all the mortgage program options in place but enforce the fiduciary standard for brokers [most states] and extend it to mortgage officers. Then let fully-informed borrowers and the other financial advisors choose the options that best fit the borrowers' overall financial plans. Of course, along with this, we should have some real education and training requirements for originators so that never again will we have buger flippers or pizza deliverymen becoming mortgage advisors overnight.

    The return of the piggyback is a welcome development, especially now that FHA has gotten so costly. But the 80/10/10 will only work if it is consistent with borrower financial plans and not if it again becomes a means to jump into an unaffordable home.
  • Jeff Skilling | | 05 Jul 2013, 01:12 PM Agree 0
    > "There are no bad mortgage programs, only bad fits
    > between borrowers and mortgage programs."
    > This is a point that is completely lost on "reformers",
    > who focus on eliminating programs
    > that were pushed abusively by......

    And when the SHF again... **as it always does**, those borrowers who (then might) have 99.78% mortgages and lose their jobs and whose homes are foreclosed upon will be called what..... "bad fits" ???

    Not everyone should own a home and IMNSHO no one should own a home who cannot put away enough money to buy with minimum 10% equity.

    Until then - rent,
  • Wm Matz | | 07 Jul 2013, 09:11 AM Agree 0
    No, Jeff. If there was a plan and the mortgage fit the plan, then a later, unexpected event [job loss, divorce, death, transfer, etc.] does not mean there was a bad fit and that the mortgage was inappropriate. The problem is that the neg ams and subprime were inappropriate ["bad fits"] for 90-95% of the borrowers who got them, as they were clearly and obviously unsustainable. So with a plan, those folks would have realized it was smarter to rent, just as you suggest.
  • Nicholas West | | 10 Aug 2013, 06:06 AM Agree 0
    I welcome back the PIGGYBACK mortgage. If used properly for a qualified borrower it increases home buying options and eliminates the dreaded and expensive PMI.
  • Jack | | 10 Feb 2014, 04:33 PM Agree 0
    Until then, rent?
    I make 6 figures and have an awesome credit profile. However, thanks to the crash, I've lost all equity and the downpayment I scrimped and saved prior to the crash. I had to move for work. Now, it will take me 10 years--until my 50s--to buy a house again at the conventional 20%. If an 80-20 was available today, I could ironically pay back the entire thing in less than 20 years. Punishment for following the rules, I guess....
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