Down Payment Question?
What is the purpose of a down payment? I know it is a rather stupid question and I mean it as just that. If you apply for a 100k dollar mortgage and the company wants 10% down you finance 90k correct? The company still gives you 100k? They just finance 90k. That makes sense but what is the point. Why not just finance the full 100k? Like I said stupid question but still. Is it suppose to be a good faith thing like earnest money?
Jim 
One of the purposes of the down payment is to ensure that you are laying something (the 10% of the price) on the table at the same time they are laying their 90%.
The only flaw with your scenario is that you say "apply for a 100k mortgage" and they want 10% down. It should read "apply for a mortgage to purchase a property this is VALUED at 100k." They are going to finance 90k and want you to supply 10k.
This is where LTV becomes important. In your scenario, the lender may only be offering a 90% Loan to Value, hence the 90k of the 100k.
There are lenders that offer 100% LTV loans.
Hopefully this helps clear up your confusion.
thanks for the clear up I just thought it was funny. Just adds more paper work I am sure.