Texas Mortgage News:Why 80/10s and 80/15s still exist, but are very strict.

 Mortgage News:  Why 2nd Lien Companies are so strict these days.

Remember we still offer second liens for those wanting a 80/10 or 80/10/10, however borrowers must have excellent credit and great liquid assets

It is also going to be hard to fix the potential problem with 2^nd mortgages. There are roughly $1.1 trillion in second-lien mortgages out there. A research firm in New York believes that Bank of America, Chase, and Wells, who combined own about 40% of them, may have to set aside an additional $30 billion (matching their expected profits for all of 2010!) to cover possible losses on home-equity loans. (Home equity loans are often open-ended, as opposed to closed-end 2nds.)

But of course banks have already set aside billions to cover bad loans – will it be enough? Of course second-lien loans are a hurdle when modifying first loans since first mortgages usually can’t be modified or written down because lien priority dictates that junior loans be erased first.

As mentioned above, analysts are arguing whether or not the billions held in reserves will be enough.

Bank of America holds $138 billion of home-equity loans with $112 billion of second liens. Wells Fargo holds $123 billion of home-equity loans, with about $103.7 billion in a junior-lien position, while CitiGroup’s portfolio is “only” about $49 billion.

For the complete story:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aYyC7r7E8N3M”

http://www.mylendingplace.com/mortgage/rates/todays/

Photo Credit:  http://www.flickr.com/photos/bookguy232/3594966695/