Is Disneyland Over For the SoCal Real Estate Market For Awhile?
We're starting to see lenders, buyers and investors doing a lot of crazy things that slightly resemble the crash of '08. I'm not suggesting there will be another crash like that. But I think it might be time to start paying attention to some of the experts.
What we are starting to see over and over again are folks borrowing against their equity, some several times over, and investing in the F&F market. Interestingly, lenders are funding them. Sometimes on multiple occasions as long as there's equity in the home.
I know of several folks that have done this repetitively and are now sitting on multiple overpriced properties that are not moving that quickly if at all. In the meantime their equity is not only tapped out on their own home but their over leveraged investments are starting to nibble away at their staying power.
This is a different type of trend than the early 2000's when liars loans were flying off the shelves and if you could fog a mirror you could qualify for a loan. Banks are all about making loans. That's how they survive and thrive. However, in that ambitious endeavor they too have temptations that can do them harm and bring harm to others at the end of the day.
I'm not for revisiting Dodd Frank by any means. But should we all start being a little more prudent moving forward and pay attention to the warning signs on the horizon? My 3 $CENTS$; adjusted for inflation.