Quote:
Originally Posted by crockett
Prior to the first housing crash myself and a partner were looking to flip houses out in Texas. At the time we were both located in FL where housing costs were ridiculous. (This was the height of the boom)
We went to Texas shopped around but the entire time we were there the lending agents kept trying to push us into more expensive properties. There were already lots of short sales on the market at this time and neither of us felt right about what was going on so we held off. 6 to 8 months later the market crashed.
Fast forward about 8 years.. Up until a few months ago I was looking to buy a multi-family building. Dealing with the finance brokers and it's the same shit all over. They have done nothing but try to make it hard as possible to buy lower priced properties but rather trying to push into more expensive stuff.
It doesn't take a rocket scientist to know that if your loan cost more than you collect in rent , then it's not a smart move unless the property value will go up fast in order to flip it.
This is the same shit they are trying to push again.. The broker even said hey don't worry if it's more we can "work" the numbers to get the loan through the door.
These guys have fucking learned nothing and are still pushing the same shit as they did before everything crashed.. I give it 5 to 10 years and we are going to see the same thing all over again, because I know this isn't isolated..  |
Just like the last bubble, it is the government pushing banks to "loosen lending standards" all over again. Go ahead, thank Obama.
http://articles.washingtonpost.com/2...sing-officials
"The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.
President Obama?s economic advisers and outside experts say the nation?s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.
In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs ? including those offered by the Federal Housing Administration ? that insure home loans against default.
Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.
Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today?s low interest rates, among other steps.
Obama pledged in his State of the Union address to do more to make sure more Americans can enjoy the benefits of the housing recovery, but critics say encouraging banks to lend as broadly as the administration hopes will sow the seeds of another housing disaster and endanger taxpayer dollars."
IT'S NOT THE BANKS BUD, IT'S THE GOVERNMENT. it's the government messing with what would be proper risk management in a non-subsidized open market, and instead forcing things and then covering the risk.
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