Definitely. And think about it this way: a foreclosure sale is still a sale. They isolate the business unit responsible for the losses (subprime), if the ltv is out of whack, foreclose, sell it to someone else (market price not loan value) and offer a discount if they finance through your company. With the tightening of lending standards, your buyer will have to have better credit. You have just recycled bad paper into good paper, and the losses are isolated to a separate expendable unit.
And these clauses are in almost all payment option ARMS. IF the LTV gets above 110% or 125%, they can automatically readjust. And they will if it makes financial sense to them to do so.
