The scariness that is mortgage lending…
Taken from the Prosper.com forums:
One of the things I’ve observe walking the neighborhoods in my neck of the woods is the push effect caused by loose lending standards.
There was a neighborhood of $150K to $200k homes I walked that had become populated by what appeared to be ghetto people. It was once populated by middle class families but they had put their modest homes up for sale and traded up when the loose lending standards allowed the low income to buy homes in formerly working class middle income neighborhoods.
I imagine these middle income families then invaded a higher priced neighborhood, again with the help of loose lending standards, and then displaced the upper middle class to even more expensive neighborhoods and so on and so forth.
When the market fully collapses, everyone will fall back into the neighborhoods they really belong based on income and class. That may leave lots of homes heavily discounted due to the excessive construction caused by the housing boom.
I don’t completely agree with his thinking but it’s something to think about.
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
No comments yet.
Leave a comment