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by Calculated Risk on 10/11/2022 10:39:00 AM
Today, in the Calculated Risk Real Estate Newsletter: MBA: Mortgage Credit Availability was Never Excessive During the Recent Housing Boom
A brief excerpt:
Although mortgage credit availability decreased in September (the MBA headline below), the most important point is mortgage credit availability was never excessive during the boom. Here is the expanded series from the MBA of mortgage credit availability that includes the bubble years (2004 – 2006).
…Look at that huge increase in mortgage credit availability back in the 2004 – 2006 period (remember “fog a mirror, get a loan”, NINJA loans: No Income, No Job or Assets?). In the recent boom, lending was reasonably solid, and most homeowners have substantial equity in their homes. Although I expect an increase in foreclosures from record low levels, there will not be a huge wave of foreclosures as happened following the housing bubble. The distressed sales during the housing bust led to cascading price declines, and that will not happen this time.
…Look at that huge increase in mortgage credit availability back in the 2004 – 2006 period (remember “fog a mirror, get a loan”, NINJA loans: No Income, No Job or Assets?). In the recent boom, lending was reasonably solid, and most homeowners have substantial equity in their homes. Although I expect an increase in foreclosures from record low levels, there will not be a huge wave of foreclosures as happened following the housing bubble. The distressed sales during the housing bust led to cascading price declines, and that will not happen this time.
Here is the article from the MBA: Mortgage Credit Availability Decreased in September
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