Although our dataset does not explicitly identify piggyback loans
, we deem a piggyback to exist whenever the CLTV at origination exceeds the LTV by at least 5 percentage points.
Many of the borrowers with piggyback loans
found that the equity in their homes was negative, and the default rate on second mortgages soared.
The survey also found that 62 percent of overall industry respondents and 76 percent of lender-only respondents said they did not believe piggyback loans
pose a threat to the stability of the mortgage industry.
Prime was two percent, unemployment was at record levels, my piggyback loans
averaged about 18 percent and FHA and VA loans were at 17 percent and four-five points.
"In recent years, homebuyers in New York took out subprime loans at rates higher than most other large cities and increasingly relied on piggyback loans
, leaving our homebuyers highly leveraged and vulnerable to default.
have taken 40 percent of the market share from private mortgage insurers.
4062 restores the maximum loan size to $2 million and allows piggyback loans
. The law also increases the maximum loan guarantee to $1.5 million and allows lenders to make loans up to $2 million in the SBA Express program, which offers a 50% loan guarantee compared to 7(a)'s 75% guarantee.
SBA said piggyback loans
, the practice of combining SBA loans with other financing, will again be allowed.
In rapid fashion, lenders were rolling out an increasing amount of adjustable-rate mortgages (ARMs), interest-only loans, stated-income loans, payment-option loans, piggyback loans
, and 40- and 50-year mortgages.
Before the financial crisis and the collapse in home values, when the use of piggyback loans
was more common and the size limits on Fannie Mae and Freddie Mac purchases were lower, many more junior-lien loans were reported in the HMDA data.
The proliferation of what Fed chairman Alan Greenspan dubbed exotic mortgage products such as adjustable rate loans, piggyback loans
, interest only loans, and home equity loans, whose monthly payments can as much as double if interest rates rise to not unfathomable levels, as well as mixed economic signals such as choppy job growth, and the way real estate appreciation has exceeded salary increases have provided fuel for many an apocalyptic scenario.
He told the industry crowd, "This was the greatest housing market in the world until they started creating 80/20, credit-enhanced, triple-A, piggyback loans
that were securitized and sold to the Bank of Ireland."