Of course! But what is truly frightening about this affair is how those that are in the business of supposedly knowing better read this stuff Check this!
The PMI Chief Risk Officer interprets these ZERO-DOWN loans as tranferring risk to borrowers?? Remarkable!!! A $ZERO-DOWN LOAN by definition carries ZERO RISK TO THE BORROWER!!! How tough is this to figure out?
Even a modest price decline will guarantee that the sub-prime borrowers will simply toss their keys. They have no history of responsible credit behavior and no other recourse anyhow. This has happened before only against a backdrop of moderate appreciation without the overhang of widespread use of this creative financing that lowered the barrier to entry to those that are in no position to weather a downturn.
