The Housing Situation Is Worse than 2008

I can add some insight to this conversation. For over 20 years, the lending institutions have used automated underwriting systems programs (AUS computer underwtring)all USDA, FHA, Fannie and Freddie. Superceeded debt to income and housing cost to income ratios are and have been normal. Compensation factors like 3 to 6 months of reserves, credit score and history, payment shock ( not going from a 250 to 1800 monthly housing cost. Wrong, yes, it is abused. Abused, i have seen these AUS systems approve when declined week prior. I have always speculated it is used as a tool to control demandside ecnomics. Appove more buyers in certian market, driving up prices. builders sell more homes. I would not look at conservative markets as problem. I’d look at high risk markets where FHA lending up 750k for Single Family Home. FHA was used to stop retraction, stop equilibrium and keep those markets afloat. Those markets never retreated to be inline with the borrowers capabilities, income, assets, down payments etc. House of cards built on a house cards.