News flash: Just like in 2007 we, as a country, are at an unprecedented level of housing un-affordability. Just like 2007, the lending industry is running out of A-rated borrowers to lend to. Just like 2007, the lending industry is scrambling to expand their “lending box” in order to convince more suckers into investing in a commodities market (housing) that is about to tank in value. I understand that a sun-screen salesman will always continue to try to sell you their product well into the middle of a blizzard. What I don’t understand is why people continue to buy it by the truckload as the barometer is dropping.
Sub-prime (or whatever pretty, politically correct name they want to give it now) was the precursor to the last real estate collapse and it will, again, mark the beginning of the next financial disaster that will inevitably devastate our economy. Take a good look at these guys, because once we start down the backside of this new bubble, you will never see them again.
That will occur if a number of things happen. 1.EZ doc loans are again extended to people with limited assets/down payment/marginal credit. 2. If incomes remain stagnant. 3. Check you local markets. Affordability is NOT an issue in many markets, and right now non-QM loans are a small part of the market and are not the drivers of the market the way they were before the BUST.. 4. Yes, inevitably at some point the market will retreat again. It has never not happened.
Sorry, Mark, but you are clueless. We are not running out of ‘A’ borrrowers, and we are not back to 2007. In fact, home ownership still remains very affordable with today’s low interest rates. Dodd-Frank has put the kibosh on lending, and in many cases, not a good way. The US gub’ment screwed up the real estate/mortgage industry, and that’s a fact. In fact, 73% of their portfolio was ‘sub-prime’ at one point. They need to stop getting so involved and let competitive markets do what they do best; compete for business.
I’m sorry “Sarcastic”, what data are you looking at to support your claim?
According to the latest housing affordability index report by the Federal Housing Financing agency that was released in August 2016, average US housing prices compared to average national income has never been higher.
Average housing prices for Americans has never been more un-affordable compared to what the average American household income level currently is. This means that the number of people who can qualify and afford housing under current Fannie Mae lending guidelines is shrinking. That is why the lending industry is scrambling to figure out how to offer more and more sub-prime mortgages that are outside of Fannie Mae’s “lending guidelines box”. The only way for the lending industry to maintain a steady level of home-loan demand in this un-affordable housing market is to remove current loan- qualifying barriers through the offering of sub-prime mortgages.
This is exactly what happened pre-2007. Historically low interest rates and artificially suppressed housing supply has created the current bubble that we are in. Sub-prime mortgages are just the last desperate measures of the lending industry to attempt to blow up the bubble just a little bit more before the inevitable collapse. This is not speculation, this is history repeating itself.
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When are you coming to New York?
News flash: Just like in 2007 we, as a country, are at an unprecedented level of housing un-affordability. Just like 2007, the lending industry is running out of A-rated borrowers to lend to. Just like 2007, the lending industry is scrambling to expand their “lending box” in order to convince more suckers into investing in a commodities market (housing) that is about to tank in value. I understand that a sun-screen salesman will always continue to try to sell you their product well into the middle of a blizzard. What I don’t understand is why people continue to buy it by the truckload as the barometer is dropping.
Sub-prime (or whatever pretty, politically correct name they want to give it now) was the precursor to the last real estate collapse and it will, again, mark the beginning of the next financial disaster that will inevitably devastate our economy. Take a good look at these guys, because once we start down the backside of this new bubble, you will never see them again.
That will occur if a number of things happen. 1.EZ doc loans are again extended to people with limited assets/down payment/marginal credit. 2. If incomes remain stagnant. 3. Check you local markets. Affordability is NOT an issue in many markets, and right now non-QM loans are a small part of the market and are not the drivers of the market the way they were before the BUST.. 4. Yes, inevitably at some point the market will retreat again. It has never not happened.
Sorry, Mark, but you are clueless. We are not running out of ‘A’ borrrowers, and we are not back to 2007. In fact, home ownership still remains very affordable with today’s low interest rates. Dodd-Frank has put the kibosh on lending, and in many cases, not a good way. The US gub’ment screwed up the real estate/mortgage industry, and that’s a fact. In fact, 73% of their portfolio was ‘sub-prime’ at one point. They need to stop getting so involved and let competitive markets do what they do best; compete for business.
I’m sorry “Sarcastic”, what data are you looking at to support your claim?
According to the latest housing affordability index report by the Federal Housing Financing agency that was released in August 2016, average US housing prices compared to average national income has never been higher.
See: http://www.fhfa.gov/AboutUs/Reports/ReportDocuments/HPI_10252016release.pdf
Average housing prices for Americans has never been more un-affordable compared to what the average American household income level currently is. This means that the number of people who can qualify and afford housing under current Fannie Mae lending guidelines is shrinking. That is why the lending industry is scrambling to figure out how to offer more and more sub-prime mortgages that are outside of Fannie Mae’s “lending guidelines box”. The only way for the lending industry to maintain a steady level of home-loan demand in this un-affordable housing market is to remove current loan- qualifying barriers through the offering of sub-prime mortgages.
This is exactly what happened pre-2007. Historically low interest rates and artificially suppressed housing supply has created the current bubble that we are in. Sub-prime mortgages are just the last desperate measures of the lending industry to attempt to blow up the bubble just a little bit more before the inevitable collapse. This is not speculation, this is history repeating itself.