Re:Ask HN: Just cashed out for 2M. What now?
by mightybyte on Thursday February 19, 2009 @10:30AM
(#487348)
With the interest only loan, wouldn't you need to make sure that you had non-recourse debt, or that the property was bought with a business entity that protected your 2 million in case of default? Are most mortgages (I'm specifically thinking in the U.S.) non-recourse in the sense that the property is the only collateral? Or is there still a way for the bank to come after your personal assets? I'd want to be 100% sure of the answers to these questions before betting on being able to walk away if the house loses value.
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Re:Ask HN: Just cashed out for 2M. What now?
by lasthemy1 on Thursday February 19, 2009 @11:43AM
(#487468)
Here's enough information to be dangerous: http://www.sandiegopredatorylending.com/?p=33
Re:Ask HN: Just cashed out for 2M. What now?
by Retric on Thursday February 19, 2009 @12:08PM
(#487500)
Most private mortgages in the USA use the house as the only collateral, however if you put less than 20% down most banks require some form of PMI to reduce their risk. This is a large part of why the housing bust has hit banks so hard, also many of the company's selling PMI went bust so the coverage became worthless.