Reply #19: Exactly [View All]

[pipoman]

Many people think that a 80% first mortgage, 20% second mortgage, amortized over 40 years, with interest only payments for the first 10 years is the norm. 20 years ago you had to have good credit to get an 80% mortgage, you couldn't exceed 35%of your income with long term debt, you couldn't borrow the 20% down, you couldn't be gifted the 20% down, you had to demonstrate you earned the down payment or it had to be in your account for a year prior to the purchase. In short you had to work hard and commit to buy a house, and every parent who has given things to their kids with no commitment from them knows, commitment is key to responsibility. The banking industry knew that they were heading for a fall so they accelerated the writing of bad loans to the point that they would have to be bailed out when the train wreck occurred.