Housing.com News, Analysis & Opinion: Housing Bubble: The Predator

"There's somethin' out there in the jungle waitin' for us...and it ain't human..."

I reference this pillar of classic '80's action movies in discussing the current effort by Congress to weaken state anti-predatory lending laws in favor of lame federal laws that're bought and paid for by the mortgage industry.

Look, everyone knows by know that housing is driving the economy. That's why we're all on pins and needles about a bubble deflation. That's why companies like ABN AMRO were able to get away with defrauding HUD, because the government was willing to look the other way as long as deals kept getting closed and houses kept getting sold. However, ABN AMRO overreached itself, and the collapse was inevitable.

The states (and D.C.) have been much more stringent and consumer-friendly when it comes to challenging subprime lending, as evinced by the Ameriquest settlement. You can't say that it doesn't benefit the states to keep a housing boom, but they're also the first ones to feel the pinch from foreclosures, defaults, bankruptcies, etc. It's in their best interest to keep the market safe and their economies humming.

Here's an absolutely blistering essay on the current market. It's worth reading. I'm not quite as strident about this as the Health Ranger, but I am completely with him when it comes to the basic truth of today's market: If you can't balance your checkbook, you shouldn't be buying a house. Corollary to that: A commission-based system is going to push the sale, regardless of whether or not it's good for the buyer.

The apex predator in our system will be the informed consumer. Someone who comes to any housing market armed with the most knowledge and research will be--to get back to the movie--"one ugly motherf^&%er" who "ain't got time to bleed."

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"There's somethin' out there in the jungle waitin' for us...and it ain't human..." I reference this pillar of classic '80's action movies in discussing the current effort by Congress to weaken state anti-predatory lending laws in favor of lame federal laws that're bought and paid for by the mortgage industry. Look, everyone knows by know that housing is driving the economy. That's why we're all on pins and needles about a bubble deflation. That's why companies like ABN AMRO were able to get away with defrauding HUD, because the government was willing to look the other way as long as deals kept getting closed and houses kept getting sold. However, ABN AMRO overreached itself, and the collapse was inevitable. The states (and D.C.) have been much more stringent and consumer-friendly when it comes to challenging subprime lending, as evinced by the Ameriquest settlement. You can't say that it doesn't benefit the states to keep a housing boom, but they're also the first ones to feel the pinch from foreclosures, defaults, bankruptcies, etc. It's in their best interest to keep the market safe and their economies humming. Seriously, would you trust a guy like Bob Ney--Mr. "I eat Freedom Fries with Jack Abramoff"--to craft lending laws that'll benefit the buyers? Here's an absolutely blistering essay on the current market. It's worth reading. I'm not quite as strident about this as the Health Ranger, but I am completely with him when it comes to the basic truth of today's market: If you can't balance your checkbook, you shouldn't be buying a house. Corollary to that: A commission-based system is going to push the sale, regardless of whether or not it's good for the buyer. The apex predator in our system will be the informed consumer. Someone who comes to any housing market armed with the most knowledge and research will be--to get back to the movie--"one ugly motherf^&%er" who "ain't got time to bleed."