|Good clear article. |
This LESA protects borrowers who could lose their homes after taking out an RM. Before the RM, a borrower who is in financial trouble at least has the equity in the house. After the equity is extracted, a borrower who is unable to pay taxes and insurance will lose the house then. Of course there is PMI so we (taxpayers) will end up compensating the lender.
There are certainly some cases where people can't afford their homes and perhaps should make better arrangements than burning through their equity and losing the house later.