Here is a quote from Kipplinger.com
"The shifting market is prompting investors to demand higher standards for loan approvals. Loans for 100 percent of a property's value required a minimum credit score of 580 last year, but now require at least a 600 score, said David Zionts, owner of Connecticut Mortgage Lenders LLC.
A high-value loan with no income verification could be had last year with a credit score of 620 a year ago but now needs a minimum score of 640, he said."
Let's see, a 100% loan, if the house value drops the bank gets to keep it, if it goes up the owner sells it and makes a profit.
This is a loan that has done considerable damage to our economy. The sharks writing these loans have no scruples. By increasing the credit scores to qualify, they're doing the same old thing to people with a higher rating. A 100% loan is gambling with other people's money.
When Wall Street decides not to insure the Sub Prime and Alt-A stuff, who do you have left to sell it to? The bad thing about the 100% loan disappearing in the next couple of weeks, is that it virtually eliminates a lot of the potential California home buyers (at current prices). That's going to smart a bit!
Forget the phrase "Soft Landing." Consider the phrase "Hit the Fan!"
After some of this stuff works its way through the courts you're going to hear these lenders being charged with "Financial Turpitude." Lets face it, "Responsibility" left the building, the minute that it became a 100% loan.