Housing Bubble 2.0 - the return of subprime

[texdav]

Originally Posted by shaker281

Back in 1992 when I bought a new home at 8%, I remember thinking how stupid my neighbor was for taking out an ARM around 6%. His rate went nowhere but down. Meanwhile I paid to refi twice.

Still, now would seem the wrong time to take out an ARM. Unless you plan on moving before the rate resets.

there actually have always been people who took out loans they couldn't payback;nothing new. In Uk for instance your not going to find a 30year fixed rate mortgage.

[shamrock847]

Originally Posted by jimhcom

People whose credit scores are under 620 and apply for 30-year fixed, conventional loans have little chance of receiving one. According to myFICO.com, 29.3 percent of Americans have a credit score this low.
Borrowers with credit scores of 720 or higher, who do qualify, are about 47 percent of Americans.
In addition many homeowners who did not lose their homes during the 2008-2011 time period but fell behind on their payments are also among the group who have suffered damage to their credit records making refinancing or relocating problematic.

What were the percentages before the bubble? If I had to guess they were about the same.

The point is while many people suffered foreclosures or credit damage over the past few years, those people represent a very small percentage of the market. There is NOT "a very large portion of the potential home buying public with devastated credit records which make obtaining any financing much less high risk loans impossible."