Housing market during next collapse

Hey Veeky Forums, we all know another collapse is inevitable, and of course it will probably not strike in the same place twice. Whereas last time it was centered around the housing market and shit loans, next time it will be something else. But I do work around real estate, and I've noticed a strange trend reoccurring lately, shit loans. Pic related is a realtor friend I have on facebook basically giving out loans to people already weighed down by a shit loan of student loan debt that would otherwise be unable to get a standard loan. But this isn't all. Variable interest loans are also making a comeback, which is where a lot of the issues in the past started. Then I was talking to a different friend of mine who is also a realtor, bringing up how the hot new thing is the zero down payment loan. Holy fuck. People that have ZERO money, ZERO savings, are now buying $400,000 aging homes in California. These people are so fucking broke, they can't even pay $1000 for some of the closing costs. Now, this probably won't be the breaking point of the next collapse, but all those hundreds of thousands of people getting these shady loans will be absolutely fucked when the next one hits.

Thoughts?

>GIBSMEDAT!!!!!

My thoughts is throw all dead beats who can't pay back loans in jail and be aggressive about it

Well this what anyone in crypto should want.

Sovereign debt keeps climbing but so does private debt. Low interest rates encourages spending and borrowing over saving.

Debt cannot keep increasing for ever.

I don't think that is necessary, I think the banks need to be held accountable for giving loans to people that can't pay it back. There is no fucking reason why a bank should give a zero down payment loan on a nearly half million dollar asset if that person doesn't have ANY money. That's absurd and should never be allowed, they're just cashing in on desperate people. The bank gets ALL of the principle payments, all of the interest paid, AND they get to keep the house when the person is foreclosed on. It almost seems like it would be in the best interest of the banks to hand out shit loans to ensure that they get max profits. Is that solid logic?

That's exactly their logic. It's the same reason you can go and get a car with no down payment and have it repo'd 6 months later. I would imagine banks used that same analogy to start doing the same with mortgages.

Ehh, but cars devalue pretty fast, whereas homes usually gain value over time. Of course, the bank could easily write off the lost value of the car, so I guess they can do some book work to make it profitable

They pull that trick with used cars that don't depreciate much in 6 months.

Yeah I work in real estate too. The amount of shit loans is getting unbelievable. Very few people can afford to put money down and government loan programs allow it to happen. Mortgage lenders and brokers push the shit loans through and unload them as quickly as they can on the secondary market. Everyone on the processing side is incentivized to push the shit through.

Most banks sell the loan as quickly as they can, very few actually ke

As long as we have stagnant wages AND rampant construction of houses, there will always be a housing bubble on the horizon.

There needs to be something in place to incentivize good loans rather than bulk loans. I really have no trust in these banks. Wells fargo got caught fucking around opening fake accounts under consumers names to meet goals, and I'm sure that's incredibly tame compared to some of the crazier shit that goes on. But it's all because the banks incentivize shit like that. Imagine how much safer loans would be if the government penalized banks for each loan that goes bad, and if employees had an incentive for certain payment milestones to be paid off. I might be simplifying it, but it seems like that would be a better system all around rather than the one we have now

Shit, here in california, theres no new construction going on because of environmentalists. it takes literally over a decade from the time someone buys a plot of land, to the point where they can build an apartment because of all the bureaucratic paperwork they have to go through just to get started. That's one of the main reasons housing is so fucking expensive here, too many people, not enough houses.

>Rampant construction of houses
I was under the impression that housing has been kept mostly in under-supply
via older communities shutting out pro-dev policies and excluding youth and crime rates
from their cities, inflating real estate prices and triggering a need for "affordable housing"

At least, in greater Seattle and Greater Sacramento areas, this seems to be the case. Am I missing something?

Bingo. My bank sold my loan on a rental property I bought a month after I closed. Was annoying to switch autopay setup. They probably expected me to default, when I'm actually going to have it paid off in 10 years and be getting $1.5k/mo in rental income :D

Environmentalism is just one part of the problem. Housing decisions are typically made at municipal/city levels and occasionally county level. They are highly influenced by senior citizens that attend city council meetings and ensure that development applications are denied. Their agenda is to retain community identity, keep it "safe" and "familiar" (i.e. old, wealthy, usually White or Asian). Then they have the gall to complain about the lack of affordable housing. They blame everything on those "indulgent developers" building their "luxury condos" and "gentrifying the community" but they are actually hypocrites. They are the cause of a lack of housing in desirable communities. They keep values high for their own equity and basically take their cake and eat it too, while young people are left to fight for expensive rental space and get shut out of home ownership.

I believe we are in a period of asset inflation due to extended artificially low interest rates.
I believe that this has subsequently created a hunt for literally anything with a yield (housing, stocks, etc) however in the past several year there has been a dramatic shift to more "risky" assets such as: crypto currencies, stocks, subprime lending (car and home), etc and will at some point collapse in on itself.

What needs to happen is the universities need to share some of the responsibility of student loans. Think about it - no more diversity admissions, worthless degree programs, etc.

I think one of two things need to happen with universities.

1. Have actual specialized degrees. No engineer needs to go through a PE class, or a humanities class. Get those guys through specialized math courses, and fuck off with the useless stuff to be "well rounded"

or 2. Limit or ban student loans. The loans and the fact that they are government backed and un-escapable allow the universities to charge whatever the fuck they want. But I do like your idea, but the university sharing responsibility that would make them have a vested interest in helping their students gain worthwhile employment.

The major central banks are losing control of their economies. A lot has changed since 2008 and the banks are still having trouble understanding and controlling growth and inflation. The old models don't work anymore and nobody is sure what to do. This is the surest sign of an impending collapse.

Do you honestly think with all of the genius around the world working in economics they really have no clue what's going on? I'm genuinely asking because that sounds pretty insane that they would leave something as big as the world's economy up to people that don't really know. I mean, I guess nobody would admit it, but seems pretty fucking dangerous

>Variable interest loans are also making a comeback

I don't understand this, do amerifats normally get a fixed rate for example the 30 year life of the loan?

No California is just a retard state

Yes, that's the safest way to do it. People that got the variable interest rate loans got their asses wrecked in '08. Especially when the shit hits the fan, you know exactly how much you need to spend to keep your house

Wow an actual smart person

The push into crypto is nothing more than a sign that investment is running out of places to go. Just shows you how cheap moneh has been to keep this shitconomy afloat

It's not that they don't know, they know Keynesian economics like the back of their hand. The problem is Keynesian economics is one step above Soviet-style planned economies, you can't just have a politburo in the guise of the central banks endlessly printing money and making decisions about interest rates hoping they can stimulate market demand and manipulate the invisible hand of the economy like God, it doesn't work in the long-run. The problem is if you DON'T believe in this system it makes you a kook in the university sector.

Don't be surprised if you see that happen here, fixed terms are 1 - 5 years only and most ausfags are borrowed to max because property

That's what happened here with the variable loans. Banks were lending to people that could BARELY make their payments to start with at the lowest interest. Then any increase in the interest rates put them out. Fixed are the way to go

In 5 years it will be worth half of what you paid for it.

Universities need to start paying fucking taxes. There's literally no reason they need to be tax exempt with the crazy tuition rates they charge.

>the banks are still having trouble understanding and controlling growth and inflation. The old models don't work anymore and nobody is sure what to do

They don't know what to do, but they are in charge of it all.

In what other business would someone who doesn't know exactly what to do in a situation be allowed to be in charge of it?