On 10/30/2013 11:45 AM, thumper wrote:


http://research.stlouisfed.org/wp/2012/2012-005.pdf


I've read that before. There's a major problem with the study. It was
focused on sub prime (or "non-prime") mortgages originating in Florida
and California in the 2004 to 2006 time frame.

The problem is that by that time the damage was done and we were well on
our way to a housing market meltdown. The changes to the Fair Housing
Act that penalized banks if they didn't originate high risk loans was
done in 1999 under Clinton.

We bought a house in Florida in 2001. We sold that house in 2005.
Shortly thereafter the housing market "boom" in Florida (during which
prices had been growing by as much as 28 percent/yr in some areas) came
to a screeching halt. "Flippers" I knew were left holding the bag and
at many defaulted. People found themselves upside down in mortgages
overnight as prices plummeted.

We were lucky in terms of timing. We bought the house for just over
$400k and sold it for $1M. Last I knew it was on the market again for
less than half that and still hasn't sold.