Cash Pay Advance

Fitch Ratings, while telling investors last Friday to expect additional “widespread and significant downgrades” on $139 billion worth of subprime loans, has cited a new factor in their “worsening performance. But over the past few years — until last spring — banks and the mortgage-backed securities investors who bought the loans the banks packaged weren’t demanding substantial down payments; they were happy with 5% or even nothing down. And some borrowers, even those who can theoretically afford to keep their homes, realize they owe much more than what comparable houses in the neighborhood are selling for — and think that prices won’t rebound anytime soon. In others, the bank forgives the balance of the loan — a common practice that’s unlikely to change now, given the criminal and civil investigations banks are already sweating through. That’s because, just as when markets change their behavior, people change, when people change their behavior, markets change also. It’s beginning to dawn on lenders and their agents — who assumed that borrowers who could afford to do so would make payments no matter what — that they could be stuck owning hundreds of thousands of houses at a minimum. Find Out More

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