The brand new judge reasoned you to definitely Fremont since a loan provider have to have approved you to loans with the first three characteristics just revealed have been “doomed to help you foreclosures” unless of course the fresh new debtor
you certainly will re-finance the borrowed funds in the or nearby the end of one’s basic rates several months, acquire in the process another and you may reasonable introductory rates. [Note 14] The fresh new 4th basis, yet not, will make they basically impossible for subprime consumers so you can re-finance unless of course property pricing increased, since if homes rates stayed constant or refuted, a debtor that have a mortgage loan having financing-to-worthy of ratio of one hundred % or a hefty prepayment penalty was not gonna have the expected guarantee otherwise financial capacity to receive a different financing.