http://www.msn.com/en-us/money/real...demand/ar-AAvOgBm?li=BBnb7Kz&ocid=mailsignout This time they are not doing Ninja loans but they are doing No-Fico-Low-Fico-Massive-Debt loans. They are lending to people who have been bankrupt and have no or low credit history and/or with massive student debt. And Fannie Mae just increased the debt/income ratio to 50%. They think using 50% of your income to pay off debts is a great idea. LOL And this is when the mortgages are underwritten, what if during the life of the mortgage, the debt/income ratio increased to more than 50%, are they going to call in the loan or repossess the house? This is going to depress the housing market because all those people who's bought the loans from the original mortgage lenders are going to try to sell the repossessed house to try to recover the money. 2008 all over again! Get ready for the Big Short again! Taleb's fat tails coming...
No longer sub-prime, they are non-prime. Difference. Big difference. If you are the ones pushing them. Otherwise they are the same old shit.
I agree it's the same old s***, just with no income, no job, no asset to jobs and income but with high existing debt. The only thing that I hope doesn't happen is the MBS, derivative products that's based on these junk loans but if you read the article, the original lenders who underwrote these loans, once they've underwritten these loans quickly sold them to "investors" who bought them down the line so what's stopping them from packaging them and re-packing them and then re-re-packaging them to sell them again and again and again over and over and over and over again until everybody is holding those pile of crap on their books again?