Will Mortgage Fraud Burst The Housing Bubble ? How Do You Prepare ?

[Ken M.]

Buy At Least 10% Below List On MLS

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Let's indulge in some basic logic:

The only variables are how and when Housing Bubble #2 will burst.

The incentive (lower mortgage rates) to commit fraud by claiming to be an owner-occupant rather than an investor has pushed mortgage fraud to levels that Federal Reserve researchers declare "rampant." Owner-Occupancy Fraud and Mortgage Performance (A 46-page PDF report is available on this link.)

Here's how Housing Bubble #2 bursts: buyers of overvalued, money-losing properties vanish, those who waited too long sink underwater (sales prices are lower than what they paid), marginal investors default, owner-occupants who lose their jobs sell or default, private equity realizes their losses will only increase the longer they hold off selling, and the momentum of sellers far outnumbering buyers cascades.

Greed is replaced by fear, and then by the realization it's too late to exit without losses. This is how bubbles burst.

https://www.zerohedge.com/personal-finance/how-housing-bubbl...

[Chris Seveney]

Quote from @Ken M.:

Buy At Least 10% Below List On MLS

************************************

Let's indulge in some basic logic:

The only variables are how and when Housing Bubble #2 will burst.

The incentive (lower mortgage rates) to commit fraud by claiming to be an owner-occupant rather than an investor has pushed mortgage fraud to levels that Federal Reserve researchers declare "rampant." Owner-Occupancy Fraud and Mortgage Performance (A 46-page PDF report is available on this link.)

Here's how Housing Bubble #2 bursts: buyers of overvalued, money-losing properties vanish, those who waited too long sink underwater (sales prices are lower than what they paid), marginal investors default, owner-occupants who lose their jobs sell or default, private equity realizes their losses will only increase the longer they hold off selling, and the momentum of sellers far outnumbering buyers cascades.

Greed is replaced by fear, and then by the realization it's too late to exit without losses. This is how bubbles burst.

https://www.zerohedge.com/personal-finance/how-housing-bubbl...

 I agree with Jay, its not a big enough market share to cause a bubble to burst - also are we speaking nationally or locally. we are seeing bubbles burst in certain markets that are specific to that market which is based on forgetting the fundamentals of supply and demand along with affordability. People tend to forget that if income in an area does not keep up with home prices, then prices in that area will come down as there is not going to be an influx of people moving to that area to buy those homes.

One simple case study is austin, which its still a great investment for those that bought ten years ago but those who bought recently thinking prices only go up are in to learn a hard lesson.