The foreclosure rate of loans originated over the last few years has been LOW!
If the strict underwriting continues, we will only see an occasional foreclosure from now on. We’ll be telling our grandkids about how back in the day there was this guy who ran a video-cam through hundreds of them!
Decorum prevents me from graphically describing the indecent probings that were required for my recent refinance. At one point they demanded a 1040a worksheet. A worksheet! I said no. Strict underwriting? don’t get me started.
I don’t think we will see a repeat of the situation in 2008-12 in our life times.
There will probably be a history channel presentation showing your Video’s in 15 – 209 years LOL!
I think we’re going to see 2006 all over again and here’s why…
Banks are getting the money to lend out for almost nothing from the federal reserve. They need to get a return on it to make money. This means lending to people in any which way possible.
Paying off your mortgage and living off the money you earn doesn’t make the bank anything. Enabling easy credit creates a housing merry go round where buyers never end up owning anything.
If you inflate house prices so high that nobody realistically can buy them everyone becomes a “renter” paying the bank interest every month. This is what banks want. Over time giving banks cheap money and the power to create inflation will allow them to control the entire market.
Think about it, they already don’t have to foreclose if they don’t want to. This used to be called collusion or predatory behavior. Unfortunately banking interests control gov now so it no longer applies to them.
Great observation, shadash.
In 2003 I bought a condo in LA and basically all they cared about was if I could fog a mirror. My wife and I just bought a foreclosure here in Vegas and they wanted serious amounts of docs, verification, and took nothing for granted. The market here is recovering but still way off 2007 highs.
We were living in San Jose and moved to Vegas so we could afford a house again. Our mortgage for this house is less than half of what our rent was for a San Jose condo. The market there has now weakened. The condo owner tried to sell it for $575,000 after we moved (and could have gotten that price in May, probably), and ended up getting $528,000 this month.