Subprime Lending With Zero Down. Will It Work This Time?

CNBC
1,000's line up for
zero-down-payment,
subprime mortgages"The loans are 15- or 30-year fixed with interest rates below market, about 4.5 percent."

All of us remember what happened the last time banks tried this. This time it's quite different and may actually work. Gleaning over the article I see a few things that stand out. Unlike last time these loans will receive $10 billion in backing from banks in the event things start heading South. There's a lot more documentation required to receive approval. Plus applicants would have to go through financial counseling before being considered and have to actually reside in the home. None of which was required when things turned sour ten years ago. Not being forced to buy mortgage insurance should also help as well.

For consumers I would think this would be a better deal then trying to keep up with ever increasing rents. Some which will be higher then these mortgages a few years from now. Sounds like a win for everyone all the way around. Check out the article for more details.