Mar
02

Big banks are leaving the building when it comes to the mortgage market: In 2007 commercial banks made 74 percent of all mortgages versus half today.

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Big investors and hedge funds have largely left the building when it comes to investing in residential real estate.  They started in 2014 and largely made a full exit in 2015.  Today you have a bunch of aspirational house humpers trying to make their money on the edge of a frothy housing market.  Flippers are flipping and families are overextending.  While the tech sector hits a snag, you have the median priced house in San Francisco selling for $1.2 million.  Many Millennials, the next large group of potential house buyers, are unable to buy because they are simply broke.  They are living with parents as grown adults or have become one of the 10,000,000 new renter households over the last decade.  With low rates, commercial banks have seen little need to beef up their lending.  In fact, big banks are not growing their mortgage lending operations.  Struck by low margins and new regulations (that should have been there in the first place), many non-commercial banks are taking up the slack.  Now you can get a mortgage while sitting on the can or going zero down up to $2 million.  What can possibly go wrong?…

Big banks are leaving the building when it comes to the mortgage market: In 2007 commercial banks made 74 percent of all mortgages versus half today.

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