Run ups in student loan debt, and quite recently, the collapse in junk bond prices had analyst think as to what really happened in the subprime mortgage market in 2008. George Soros was recently quoted this week regarding China's financial markets. He said that this scenario reminded him of the "crisis we had in 2008," The Sunday Times in Sri Lanka mentioned this in their post.
But a viewer of Quicken Loans' latest ad, Rocket Mortgage, might just think otherwise. After all, what Quicken wants to tell home buyers is to simply, "push button, get mortgage." But aside from television ads and social media, one should look at the numbers. Lending standards have reduced their qualifications, but they remain tighter as they were during the mid-2000s as the bubble began inflating. And while this is the condition, qualified buyers are still complaining about not getting what they want, an article from Fortune.com said.
On the other hand Quicken Loans President and CMO Jay Farnar said that Rocket Mortgage enables his firms to enhance its lending products and customer service. This system also allows them to collect consumer data that helps make underwriting more reliable.
Mortgage originations have remained at the same level for the past two years and lenders are offering fewer mortgages nowadays compared to 2012 according to Mortgage Bankers Association data.
Housing analyst Marc Hanson contends that about 25 percent to 60 percent of the market is being supplied by "unorthodox ... incremental demand using unorthodox capital."
Hanson cites the Bay Area as an example, where the average home price is $1.45 million with an average income of $180,000 per year. With the usual homeowner insurance costs, credit card and car debts, he says that the average person who is simply buying a home used for shelter will only be able to afford a $778,000 home, nearly 50 percent below the average cost of a home in the area which is around $1.45 million.
