100% financing will be the new 80-20.Over the next few weeks, banks will begin to eliminate second mortgage programs, but will re-introduce the 100% mortgage.The lender will tout this as a No Mortgage Insurance loan (PMI), but it is really a self-insured loan.

I have seen general requirements as such:

• Purchases only

• Must be conforming loan amounts (single family house is currently 417,000)

• Full documentation with a 660 FICO score

• Stated income with a 680 FICO

• Must have 4 months reserves

• Will do 2 family homes

• Will do interest only loans

I have several comments about this.A self insured loan always has a higher interest rate because, the lender is really paying the PMI.You will never be able to lower the interest rate, but can remove the PMI. The interest rates are much higher on these loans to cover the lender cost of PMI. Why not just put down 5% of the purchase price and get a normal interest rate?Truly, what is the difference in this loan product when the house values continue to decline?

– Dale Siegel