As in all misfortunes, some people will find an advantage from the economic crisis.

In the company of them can be found hard-money backers, lenders who confer money solely on the principle of collateral. These non-institutional lenders compel considerably less paperwork than institutions due to they do not have a care about whether individuals have the means with which to maintain the payments or whether they are creditworthy. So things such as fico scores, whether the person has a job or not and what their income is like are of little concern.

If payments are not kept up with, the hard-money lenders obtain their money recovered by virtue of foreclosure. They regularly command thirty or thirty five percent deposit to confirm there is sufficient equity at hand to cover foreclosure expenses. Hard money loans are also characterized by higher rates of interest and short terms of payment
Hard money loans have a longer history in America as back in the 1900s there was no way to verify employment or report credit scores.

Over the decades, loan underwriting more and more started to focus more on the capacity of borrowers to repay their loans predicated on their income vs their cost of living, as well as their desire to pay back as evidenced by their credit record.. As collateral became less and less significant in the decision making process, down-payment requirements diminished and for many borrowers dematerialized fully.

Hard-money lending today is thus a throwback to the era before the capacity and willingness of mortgage borrowers to repay became important parts of loan underwriting.

It should represent a more ethical and solid era of lending practices.