Q A Z Z O O . C O M


NinjaLoan1We are not alone as others have written about or speculated on the next bubble in real estate. The goal of Qazzoo reviewing the next bubble is to help as many people avoid it as possible. When we have had bubbles every couple of decades since the first bubble in 1800 someone might think that we would learn to avoid them. But that is the nature of the economy. We allow people to do to themselves all types of good things and some things that are questionable.

Texas as an example had a law in place for years that did not allow the home owner to take out cash from their homes unless unusual circumstances presented themselves. This kept people from speculating with money that was not their own. It also kept people from being a free as in other states and that is not the way things are done in Texas so that rule was lifted or modified several years ago so that Texas could enjoy the same pitfalls that befell the rest of the country. Even if Texas hadn’t modified their equity position the state was still vulnerable to the worst thing to ever hit the housing market.

What did in the housing market and the economy and caused so many people to lose it all or at least their homes was what many referred to as Ninja loans. Ninja is a cute name for

No income, No Job, No Asset loans which were the created by mortgage lenders in order to increase their volume of loans and keep their companies happy and pushing paper back and forth. Ninja loans were available to anyone that wanted one and they were not that expensive. This created a glut of bad loans and eventually ended in the biggest financial down turn in American history in about 80 years.

But little bubbles occur without the calamity that befell us all when the bad loans were mixed with good loans and sold in the secondary market. So will this same confluence of bad ideas happen again? It is doubtful but we are an imaginative group of capitalists and we will come up with a new way to create the same result. The idea is to be able to spot the signs before they have affected our financial security.


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