A “heartbeat loan” is a loan given to anyone with a heartbeat. It’s sometimes said that banks so dearly wanted to make mortgages (and collect mortgage fees) that the banks would give a loan to anyone in the 1990s or early 2000s—before the housing crash of 2007 changed matters.
 
“Heartbeat loan” is cited in print from at least 2008. A similar term is “pulse loan” (given to anyone with a pulse).
 
     
Mr. Mortgage
‘Old-School’ Wild-Card Housing Threat Coming Into Play
Posted on June 18th, 2008 in Mr Mortgage’s Personal Opinions/Research
(...)
Now, that the days of free money and ‘heartbeat loans’ are over, ‘old-school’ factors like employment, income levels, interest rates, consumer sentiment and the health of the broader economy will have a significant influence once again.
 
Protein Wisdom
Comment by cynn on 9/16 (2008) @ 7:40 pm #
This is absurd. This catastrophe has little to do with demographics or “social justice.” The Wall Street moneymakers had a jones for hacked up hamburger loans; they made huge fees. The lenders could offload their liability, and churn even more fees. The greedy/naive borrowers lapped up the easy money. Everyone was cynical and blind at once. And the deadbeat Congress and Administration was both complicit and incompetent.
 
Hence the heartbeat loan qualifications. And now the magic money is vaporizing. You can’t lay absolute blame on Dems or Reps. Both had a stake in keeping the ride going. Ownership society, anyone?
     
Broker Outpost Mortgage Forums
ppulatie
Posted - 09/27/2008 :  08:25:03 AM
Mike,
What you say sounds good on paper, but that is all. The World loans are going belly up just like WAMU.
World cut appraisals by 10%, but the market has completely blown through that. World took credit scores in the 5’s, if there was equity. Their loans were “heartbeat” loans.
   
RushLimbaugh.com
The Redistribution of Housing?
May 19, 2010
RUSH: Orange County, California.  Hi, Bob.  Great to have on you program, sir.
CALLER:  How you doing, Rush?  Thanks for taking my call.
RUSH:  Yes, sir.
CALLER:  Hey, listen, you’ve been talking about the market.  I’m in real estate, and I’ve been doing market evaluations for about 32 different banks over the last 14 years, and, you know, we’ve just gone through the first phase of these foreclosures, which I call the “heartbeat loans.” You know, if you had a heartbeat you could get a loan.  Those have been pretty much absorbed now by the investors coming back in and buying them up but we have a whole second phase of foreclosures coming in that the banks aren’t really talking about, and these are the-million-dollar homes, and there’s a lot of them out there.