Quote:
Originally Posted by tonkovich
yeah, speculators had nothing to do with the real estate boom either.
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IMHO the housing bubble was created by the polititicians, changing the philosophy of home ownership from a privilege to a right. As they lowed the requirements to get a mortgage and kept interest rate low they got the ball rolling.
Speculators took advantage of it and drove it over the edge.
If they had kept requirements at 20% down, reasonable - verifiable income requirements it would have never occured. Speculators would not have had the opurtunity to create the bubble.
And this presents a perfect example, speculators did drive prices out of whack for a while, now they are returning to normal. But the pendulem swings too far in both directions, it swung to far to the high end, now to far to the low end, it will return to the center.
When I bought this house (88), if you didn't have 20% down the banks would hardly look at you, people complained a few years ago Mtg interest rate were at 8 % OH MY GOD. When I bought this house interest rates were in the TEENS (mid to upper). We took an ARM at 11 % and I thought we did real well, no one offered us assistance ie government sponsored write downs etc.