[Marquette]

Quote:

Originally Posted by FinanceDude I disagree, I think once the customer has been APPROVED for the loan, why yank it because market conditions have changed? Regardless of the "abuse" we are debating, how has the lender been "wronged"? they still got extra interest, and if things go really haywire, they still have a secured loan I think unsecured debt is more risky than secured debt, but that's just me........

do they still have a secured loan? If you're the second lender, doesn't the primary lender have first rights? If someone has an 80/20 on a $200k house and the house value drops to $160k, then wouldn't the second lien holder, for all practical purposes, be stuck with an "unsecured" loan?

I'm not arguing that the lender has been wronged... obviously, they're accounting for the additional risk with higher rates pegged to higher LTVs (at least, with the HELOCs I've seen). But, given the borrower behaviors we've seen posted in stories here, it might seem the lender is a bit worried about walk-aways and higher-than-anticipated defaults.