Sometimes, there’s a message out there with your name on it, so you get hit on the head with it again and again and again. Here are some of the messages we got yesterday, and they all add up to the same thing.
One of the problems with HELOCs was HELOCity, where every homedebtor used the line of credit not for major home improvements or emergencies, but as a full-time ATM. People bought a lot of giant-ass SUVs and vacations and bling using the equity in their homes. Why would they do something that stupid? Do they really think they’d never have to pay it back? Some of us actually do remember when second mortgages were subprime mortgages throughout the industry.
Speaking of subprime, you know what else is back? Subprime mortgages! That article we featured last weekend on the Dignity Mortgage wasn’t the only sip of subprime sangria. Gotta love this quote:
By Matt Clinch | CNBC – February 8, 2013
The sub-prime market – risky mortgage backed securities – is hot again and its revival is exceeding many people’s expectations, the chief market strategist at Rosenblatt Securities says. He believes this will end badly.
The subprime mortgage crisis which led to the financial crash of 2008 involved institutions making loans to those that had difficulty maintaining their repayment schedule.
Wall Street brokerage firm Rosenblatt – which has been monitoring the situation since the last storm – says the credit-led bull market is well under way.
"The subprime market’s revival is proving to be even stronger than we had anticipated," Brian Reynolds said in a research note. "This is just a credit cycle, and it will eventually end badly like the others."
We are sure you are thinking the same thing we are: How can we best profit from so many other people’s stupidity?
Next, several different reports of an increasingly skewed seller’s market. We’ll have one up bright and early to start the week, and it’s a doozy. Here’s a smaller example, an on-the-ground report from Definitely Not the Real Bay Area. This poor agent says she listed a Blossom Valley property and now her phone is ringing every ten minutes. Won’t someone let her get some quiet time and please offer twice the asking price already?
Buyers now have to write beg letters to get noticed when there’s 40 offers on the table. And who can forget the lottery line for just 4 Gale Ranch models in San Ramon. Need we remind you, Gale Ranch is not only in the East Bay, it’s in a place where they are still making more land.