The latest legal reasoned that Fremont as the a lender must have accepted you to definitely loans towards the very first three features only explained had been “doomed to help you foreclosure” unless the brand new borrower
you certainly will refinance the loan at the otherwise near the stop of your basic speed months, to get in the act a unique and you will lower basic price. [Notice fourteen] The newest 4th grounds, although not, tends to make it fundamentally hopeless to own subprime borrowers to re-finance except if homes costs enhanced, since if property pricing stayed steady otherwise rejected, a debtor with a mortgage loan having financing-to-well worth proportion of just one hundred or so per cent otherwise a substantial prepayment penalty wasn’t planning feel the necessary equity otherwise economic capability to see another type of financing.