Alternative Mortgage Transaction Parity Act - AMTPA
A law passed by the U.S. Congress in 1982 that effectively opened up the mortgage market. Prior to the passage of the Alternative Mortgage Transaction Parity Act, many states had laws on the books restricting the type of mortgages that lenders could offer other than the vanilla fixed-rate mortgage that your grandpa always advised you to stick with, advice that always seemed to come in the middle of your birthday parties ("But Pop Pop...I'm only 6. I don't have a morch-gage.")
The AMTPA preempted those state laws and made more exotic mortgages available nationwide. This included things like adjustable-rate mortgages (where the interest rate you pay fluctuates according to changes in overall interest rates) and balloon payment mortgages (where monthly payments are kept low by tacking a single large payment sometime down the road).
The law gave consumers and lenders more flexibility, possibly leading to more access to home ownership. However, later critics (we're talking a couple decades later at this point) would blame these more unconventional mortgage structures for fueling the housing bubble of the mid 2000s, which ultimately led to financial crisis of 2007-2008.
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Finance: What is a second mortgage?4 Views
Finance allah shmoop What is a second mortgage Okay you
know what a first mortgages it's otherwise cleverly named what
is called it is called oh yeah Mortgage it's Just
a loan on a house You paid four hundred grand
for this baby Hundred grand down two hundred fifty grand
in a first mortgage And they're still fifty grand You
owe well where's that fifty large coming from the bank
wouldn't loan you any more on a first mortgage that
was costing you six percent a year Tio you know
to rent that money So you had to get a
second mortgage which should things go awry and you become
a statistic Well that's it's fully behind the first mortgage
in the priority stack of payback So in a bankruptcy
situation the first mortgage first what's called a first mortgage
get it fully paid along with any fees associated with
it and back interest accrued and any other things that
are associated with that first mortgage it stands in line
first in priority Then any cash leftover gets attributed to
that second mortgage So not surprisingly second mortgage money costs
a lot more to rent then first mortgage money because
the risk of non payment in a bad situation is
meaningful E higher especially when the borrowed does this for 00:01:25.136 --> [endTime] a living
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