No. of Recommendations: 5
Loan anyone money to buy a house.

As long as they have 20% for a downpayment....

That USED to be the standard back in the 70's. Banks never went belly-up because, let's face it, you can pretty much recover your loan if you have to repo the house because you only have to get 80% of it's market value. And few people are going to over-extend if they have a lot of equity at stake (or the foolhardy ones will never be able to save 20%).

It was these "borrow 125% of your home's value" BS deals that got so many people into hock with no repercussions for just walking away.


We used to need EQUITY to borrow money, remember?

Banks got greedy and stupid.
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