Mortgage Market Blowup?

Gradually Then Suddenly Great Reset It's Probably Nothing 16 Comments

I’ve been expecting an implosion in the mortgage market for some time given the rise in interest rates relative to the debt that has to be supported, but so far that isn’t happening. It seems our friend Ron Butler has become privy to information that indicates a black swan event may not be far off, however.

Thread reader here.

 

16 Replies to “Mortgage Market Blowup?”

  1. Aren’t MICs the bottom feeders of the mortgage world? Second mortgage and last resort lenders jumping out of buildings ain’t the end of the world.

  2. Can you unroll this? People without X account can’t see threads or responses, I’m assuming there is more than this single tweet?

  4. I’ve seen a lot of them promoting returns of up to 15% lately, and yet the prospectus doesn’t support anywhere near that…

    it probably won’t be the first one, nor the last. And I suspect at least some of them are arbitrage spread plays, which are now getting burned by non-payment and increased payments on the loans backing them.

  7. Toxic Canada.. Its not real, yet it is.. You cant drop 10 million new people out of the sky and expect demand to not drive prices.. Everybody is happy except Canadian kids.. They are SCREWED into a lifetime of ridiculous renting..

    Hey, but as long as the foreign investors are happy. right?..

    1. and express that happiness with votes.
      some day lm going to corelate imigration figures with a delayed pattern of
      liberal wins.
      and publish the findings and change the outcome of yet another pattern victory

  9. Would the Canadians mortgage market have been more stable if you had longer term fixed rate mortgages?

    Spacing out the refinancing, or eliminating the need to ever do it entirely would definitely reduce the number of home buyers defaulting from suddenly increased mortgage payments.

    Of course the downside is the bank holding the mortgage would be collecting less than the current market rate on the older established low interest mortgages. It would cut in to their profits, and possibly their financial stability.

    Or they can have issues with their financial stability anyway?

    1. Fixed rate mortgages have different issues than variable rate loans as rates rise, but they still have issues.

      As you already noted, the lender takes the hit as the existing mortgage is no longer paying a market rate. Most mortgages get repackaged and sold as bond-like investments, though, so it is the holder of those notes that gets the hair cut and not the original bank/S&L/whatever. Most of the time this is pension funds, mutual funds, and similar entities and thus the losses go to their investors.

      Another effect which is showing up very strongly in the US housing market is what the industry calls “lock in” — people who took out or refinanced mortgages at the ultra-low rates can not move without a sudden, large increase in their payments as they have to take out a new mortgage at the higher current rates. So they refuse to sell if at all possible, and the market for existing homes freezes up. The effect is similar to what happens with rent control.

  10. brought up the intro and txt msged a snap shot from my real estate agent.
    lm taking steps to divest aiming for spring 25 or earlier still work to do. doing some things a 2nd time. means time to let go.
    will advise what he says
    l pose the Q to a lady friend are 250,000 reasons enough to do a thing.
    topped off by almost as much indexed pension

    l dont want a ball and chain when l get that phone call from the GP.

    l got things to do l exhort anyone here in the same boat imagine you had 6 months.
    well, you gonna wait until it actually happens?

  11. A “multi-million dollar fund … blowing up”? Yawn. That and a couple of lemonade stands. Hide the children.

Proudly powered by WordPress & Skyrocket Themes

MENU

Navigation