Shayegan, contacted on his cellphone by the AP, politely declined to speak of the piggyback rides until he could talk to an attorney.
Because of his piggyback antics, he has been banned from high school sporting events in Washington, Oregon, Montana, North Dakota and Minnesota.
Gill's assertion is supported by the latest analysis by Standard & Poor's, an influential Wall Street ratings agency, which analyzed nearly 640,000 piggyback first-lien mortgages in bond pools.
I expect every mortgage broker, loan officer, lender and real estate agent that knowingly put a client into a piggyback mortgage to contact them and tell them to read this Critical Report," said Gill.
Buyers choose from a dizzying array of new loan products, including 40-year, interest-only (IO), low-document or no-document and piggyback loans, as well as option adjustable-rate mortgages (option ARMs).
The problem for individual borrowers comes when risks are layered on top of each other--for example, a 100 percent LTV piggyback with an IO first mortgage and a HELOC second mortgage.
When buying a $200,000 home with a 5% down payment, SingleFile could result in a monthly mortgage payment that is about $50 less than a typical piggyback structure involving closed-end second mortgages.
By comparison, piggyback structures can include second mortgages that are balloons or HELOCs (home equity lines of credit) in which rates can adjust early and often.
LOANS MAY POSE RISK TO MORTGAGE SYSTEM