Easier mortgages can have problems

Keri Weishaar lives in a spacious, four-bedroom house near Tampa, Fla., thanks to the easy financing that prevailed during last decade’s housing boom.

“It was basically nothing to get into this house,” said Weishaar, 48, who bought the house in the spring of 2003 after obtaining a nomoney down, adjustablerate mortgage.

Then again, Weishaar and her husband are fortunate to still have their home. That same mortgage eventually morphed into a financial albatross and, for a time, the house in the suburb of Tarpon Springs was on a countdown to foreclosure.

As home values plummeted after the housing bubble burst in 2007, many borrowers with exotic types of loans were stuck, unable to refinance as lenders began to tighten their lending criteria. That set the stage for cascading mortgage defaults that eventually took down Lehman Brothers, Wall Street’s fourthbiggest investment bank at the time, 10 years ago this week. Lehman and other financial institutions were big buyers of securities backed by some of these dicey mortgages.

Today, getting a mortgage is tougher — and less risky. For one thing, nomoney down mortgages and their ilk, which enabled many borrowers to initially lower the costs of buying a home but often saddled borrowers with far higher balances or steep monthly payment increases, have vanished.

Banks also remain a bit gun-shy after racking up billions in losses stemming from mortgages gone bad. That means homebuyers, especially those with lessthan-stellar credit, face more hurdles qualifying for a mortgage than they did in the housing boom years.