Nationally, the share of mortgages that are underwater fell by about one-half between 2011 and 2014.
Sentiment: NEGATIVE
I think something that forces financial institutions to write down underwater mortgages, I think, would be a sensible thing to do.
Within a few months in 2008, household finances were crushed as asset values fell, millions of jobs were lost, countless credit cards were canceled, and thousands of homes were foreclosed on.
I had begun to worry about the housing market back in 2003, when lenders first resurrected interest-only mortgages, loosening their credit standards to generate a greater volume of loans. Throughout 2004, I had watched as these mortgages were offered to more and more subprime borrowers - those with the weakest credit.
The universe of mortgage lending has gotten to the point where there is a place in it for everybody.
They flooded liquidity in the marketplace but the mortgage rate is based much more on expectations of inflation. So if the average investor believes that there is inflation coming, they'll move that rate up.
I've got a huge, huge position in mortgage-backed securities. I started accumulating them in 2009, when the market was really down and things were really scary.
The Obama administration deserves credit for quickly ending the housing free fall. In particular, Obama empowered the Federal Housing Administration to ensure that households could find mortgages at low interest rates even during the worst phase of the financial panic.
Housing was ground zero for the Great Recession. Between early 2006 and Obama's inauguration in 2009, average house prices fell by a third across the country. In certain areas, including cities as diverse as Akron, Orlando and Las Vegas, house prices fell by more than half.
In 2007, in the early 2007, everybody saw the housing market was falling, and at any given moment a lot of people thought it was going to fall more, and a lot of people thought it was going to rebound. You just didn't know.
We think if the economy remains weak that we could see mortgage rates trail down and we think that we could see rates below seven percent into early next year.
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