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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Get Ready for Subprime Mortgage Crisis 2.0, Collapse in U.S. Housing Market Coming...

Housing-Market / US Housing Jan 16, 2014 - 08:17 AM GMT

By: Videos

Housing-Market

Forget what you are hearing about stiffer mortgage lending requirements. It’s not true. Real estate expert Fabian Calvo says, “If you can fog up a mirror or you have a pulse, they will give you a home loan. That’s what they have done with the car loans, and that’s what they are doing with housing loans.” The so-called new rules do not have any down payment credit score requirement. Zero percent down loans are going to make a very big comeback. According to Calvo, “After the mid-term election, you’re going to see no-money-down loans just really roar back. It’s all part of the pump and dump I’ve been telling you about for well over a year.”


So, are the housing market problems behind us? Calvo, whose company buys and sells $100 million in distressed real estate debt annually, says, “Bottom line is we are still in a situation where half of every mortgaged home in America is completely underwater, and the Fed is going to have to print money for a very long time before those values return. It’s just a matter of fact.” Calvo goes on to say, “Now, worst of all, they are beginning to securitize so they can bring in even more capital. A third of all real estate in America is rental properties. You are going to have Wall Street being the biggest landlord in America. It’s subprime 2.0.”

According to the Director of the Consumer Financial Bureau, Richard Cordray, new mortgage lending rules are supposed to make sure “the great mortgage meltdown never happens again.” So, is the housing market more resilient to another downturn? No way, says Calvo,“They’ve securitized the rental properties, which are now making the net effect of a collapse in values in the market much more devastating for the economy.” Calvo predicts,“The next leg down in the real estate market will be much, much larger . . . Homeowners, who may have a little bit of equity in their home, should be very cautious right now.”

Still, Calvo says don’t expect a crash in 2014, and he says, “We’ll pretty much see a repeat of 2013.” Calvo says to watch when hedge funds start selling their real estate holdings. He says, “I think that will be around 2015. That will be the handwriting on the wall that the collapse in housing prices will be coming.” Calvo thinks the next real estate collapse will be caused by forces outside of the housing market. Calvo says, “I think the next leg down in the real estate market won’t be centered around the housing collapse. It will be centered around the multi-bubble collapse of the dollar, the bonds, the government debt, all collapsing simultaneously. . . . This next collapse will make 2008 look like a dress rehearsal for the really big multi-bubble collapse we will be seeing.”

So, how are the rich going to protect themselves? Calvo, who does business with millionaires and billion dollar hedge funds, says, “A year ago, a third of the room would say buying gold and silver was just kind of crazy. Today, you have half of the room investing much more than 10 or 15% of their portfolio into physical gold and silver. To me, that is a big signal.”

Is there any good news? Yes! Calvo says, “There’s going to be spectacular sales, spectacular deals, way more than you saw back in 2008.” Join Greg Hunter as he goes One-on-One with Fabian Calvo from TheNoteHouse.us.

By Greg Hunter

USAWatchdog.com

© 2014 Copyright Greg Hunter - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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