General Discussion

There is just too much of a disconnect between the rise in property values versus wages. It just doesn’t work for first time homebuyers so they are inventing an even crazier loan to try and close the gap.

There are many reasons this stinks but the one that stands out to me is that the only way it even remotely works is in a rising market. If the market doesn’t rise, those borrowers will be upside down for decades since they will be making no progress against the borrowed amount.

I wonder if the banks even have any interest in this. One of the lurking monsters in the housing market is sea level rise. I have a friend that wrote a book about SLR and he made the astute point that the viability of housing won’t wait until the actual effects take place. It will happen when it is imminent within the foreseeable life of a loan. Why would a bank want to be on the hook for a property that will be underwater in 30 years. It just gets more critical looking 50 years out.