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Thread: House flippers triggered the US housing market crash

  1. #31
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    Quote Originally Posted by bajisima View Post
    The other issue is in many markets its cheaper to own than rent. If you can get into a first starter home with little down and low interest rates vs paying $2000 a month for a place that has a lease they see it as an investment in their future. I suppose for most people they don't see it as something they will lose down the road, to them it will be their home. Few see a crashing market or loss of income when they buy a home.
    For my daughter and her husband in Silicon Valley, buying was a way to stabilize their rapidly rising housing costs.
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  2. #32
    Veteran Member bmanmcfly's Avatar
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    Quote Originally Posted by Babba View Post
    It was NOT subprime borrowers. Blaming the poor was always stupid and tinged with racism.





    House flippers triggered the US housing market crash, not poor subprime borrowers
    Why does it have to be a singular cause?

    Also, why is "poor" apparently some racist code word?

  3. #33
    Cat-tastic Babba's Avatar
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    Quote Originally Posted by bmanmcfly View Post
    Why does it have to be a singular cause?

    Also, why is "poor" apparently some racist code word?
    Because house flipping was a larger cause than lending to traditionally unqualified buyers and we need to understand what were the greatest causes. We can't avoid the problem in the future if we don't understand how it happened.

    Minorities tend to be poor at a higher rate than whites.

  4. #34
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    Quote Originally Posted by bmanmcfly View Post
    Why does it have to be a singular cause?

    Also, why is "poor" apparently some racist code word?
    Doesn't that have to do with conservatives blaming the community reinvestment act, and red lining?

  5. #35
    the "good" prag pragmatic's Avatar
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    Quote Originally Posted by labrea View Post
    On the leading edge of the crisis was the number of adjustable rate mortgages scheduled to reset at a higher interest, and the inability of borrowers to renegotiate the interest rate.

    And the subsequent decision of those borrowers to just walk away from their obligations.
    Last edited by pragmatic; 7th September 2017 at 02:47 PM.
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  6. #36
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    Quote Originally Posted by pragmatic View Post
    And the subsequent decision of those borrows to just walk away from their obligations.
    Or be foreclosed on when they couldn't make the new, higher mortgage payments.

  7. #37
    Junior Member Claudius the God's Avatar
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    It is much harder to get a loan now than it was prior to 2008. The banks though still make money on loans and so does everyone in the money chain of buying and selling houses. The relationship between incomes and mortgages is completely out of whack. It used to be a multiple of yearly earnings, something like three times was the maximum anyone would loan you back in my parents time. Now it can be up to 50% it seems. If you want to keep costs lower, you must force bankers to take fewer loans which means fewer commissions, fewer houses built, fewer refridgerators, ovens, lawn mowers, TVs, etc. We are addicted to easy money folks and it starts with the banks and the regulators. Stop the money flow and the rest follows. Its that simple.

  8. #38
    Veteran Member bmanmcfly's Avatar
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    Quote Originally Posted by Babba View Post
    Because house flipping was a larger cause than lending to traditionally unqualified buyers and we need to understand what were the greatest causes. We can't avoid the problem in the future if we don't understand how it happened.

    Minorities tend to be poor at a higher rate than whites.
    Except they are both interrelated... Flippers try adding to the price of the property where people are getting NINJA loans to cover that increased cost.

    So, if not for the loans then the price would have been capped at a more reasonable price.

    Bottom line, give up free market principles and this is one of the results.

    Quote Originally Posted by labrea View Post
    Doesn't that have to do with conservatives blaming the community reinvestment act, and red lining?
    I'm not familiar with that aspect.

  9. #39
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    Quote Originally Posted by labrea View Post
    On the leading edge of the crisis was the number of adjustable rate mortgages scheduled to reset at a higher interest, and the inability of borrowers to renegotiate the interest rate.
    ...Or even understand how ARMs worked when they signed up for them.

  10. #40
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    Quote Originally Posted by labrea View Post
    Doesn't that have to do with conservatives blaming the community reinvestment act, and red lining?
    When virtually everyone is playing the game, everyone can blame everyone else and technically be right.

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