Quote:
Originally Posted by LexusLover
Very few "jumbo" loans are made based on the "value" of the collateral provided to support the loan,* but are made on the strength of the borrower to repay the loan over the LIFE of the loan as it is written initially. I will give you an example:
I once had a commercial lending officer tell me that he knew a borrower wasn't going to pay back the loan when the borrower did not ask him what the interest rate was going to be, or attempt to negotiate a lower interest than the rate offered.
It didn't matter to the borrower. He wasn't going to pay it.
*The amount of collateral to borrowed funds ratio might be relevant to the lending decision simply because of internal or external regulations applicable to the particular lender... but that doesn't go to the decision to loan the money.
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I would have given him 70% LTV (assuming I inspected the collateral myself and agreed with the figure) with a 30% down payment.
Nevertheless, the US government can print the money to pay back any loan they want to pay back.
