Quote:
Originally Posted by Rusty
Going to be a repeat of 2008 with the housing lending in the future.
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The market then was a completely different market than now.
THEN:
1. No mortgage lending regulations, at least not to the likes of today. This resulted in a lot of bad/toxic mortgages being sold off to the secondary market that eventually/essentially became worthless securities. Remember Lehman Brothers?
2. There was too much supply then, paired with too many homeowners having too many mortgages that they did not qualify for. When they defaulted on the loans, this added to the massive housing supply and it was truly a buyer's market in terms of housing supply. The foreclosed homes could not find buyers quick enough.
NOW:
1. Much stricter mortgage lending regulations. There are so many variables and factors the underwriter looks at from the time of mortgage loan application to your closing date. You'd be surprised of how many people start off being qualified, and get denied towards the end.
2. Not enough homes. You can't have a housing market crash like the one in 2008 with the lack of supply. The housing market crash of 2008 is the main driver of the shortage we are experiencing today.
On a side note, depending on the loan type, a potential homebuyer could have a credit score as low as 580 to qualify, amongst other requirements.