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Second Mortgage Loan Programs 2010

Reuters reported that second mortgage loans defaults rose again last quarter.  The 2nd mortgage defaults have made such an impact that borrowers can no longer get second mortgages for cash out or consolidating credit card debt unless they have great credit and at least 25% available home equity have the new loan is factored into the combined loan to value.

The second mortgage loans originated in 2005 and 2006 with the 80-20 loans are biggest contributor to the loan defaults.  Many of those borrowers that have 100% loans were not afraid to walk away from their homes.  Many borrowers that took out adjustable rate credit lines a few years ago want to refinance this debt into a fixed rate second mortgage, but those programs no longer exist.  Second mortgage rates remain low, but not many borrowers can meet the criteria to qualify for a home equity loan in 2010.  Only time will tell if the second mortgage market can recover.

Posted in 2nd Mortgage Tips, Mortgage News, Second Mortgage Updates.

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