Our Credit Department is considering a 100% LTV subordinate Home Equity Product. I was wondering if anyone has any information or could direct me where to find more info in regards to the part that these loans played in the mortgage meltdown. I have been researching and am looking for material to back my reasons for us to approach this with knowledge and caution.

These will all exceed the supervisory LTV limits and have to be reported to the Board of Directors on a quarterly basis. As this portfolio grows, you can expect increased regulatory review of the portfolio.

Did they play a role in the mortgage meltdown - sure. They also melted down a few banks. If your management thinks that the risk of housing values declining is over, they might want to pick up a newspaper once in a while.

This is a product that does not do a consumer any favors. IMHO - Unless this is a special situation (read: customer that really doesn't need the loan) these types of loan products when mass marketed are borderline unethical and it is the exact type of product that is eventually going to lead to further and further regulation.

Thanks Randy!