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- December 13, 2011 at 10:47 pm #239495AnonymousInactive
** *In an article in todays paper ( and probably on the internet), ” The Federal Reserve Bank of New York stated that Real Estate Investors (specifically amateurs who used low down payments and subprime credit) are largely to blame*for the housing crash. The article mentions that these findings focused on “undocumented” dimensions previously overlooked.”
“More than a third of all U.S home mortgages granted in 2006 went to people who already owned at least one home, according to the report… Paul Bell, the president of real estate association, said amateur investors were behind the soaring home values seen during the first half of the decade. He also noted those buyers were simply taking advantage of how easy it it was to buy homes at the time due to questionable lending and government pressure on banks to promote home ownership. The report concludes that lenders and regulators must limit speculative borrowing to avoid future housing busts.”
*I am sure some of you will say “This is so old, it should be handled as an antique.” The reason I post this is, this was an official report and not what I think or what the neighbor down the road thinks. Of course you always take this reports with a grain of salt, but placing the blame largely on amateur investors is new from a FRB. I know after reading countless posts on this topic, many already knew this. This article was in today’s Palo Alto Daily Post.
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