In this International Herald Tribune article, there’s a reference to mortgage servicers in England buying homes and renting them back to the original owner. Lenders take a bath on the loan amount, but probably get a better deal than if they sold it on the open market, and it keeps up the values of other properties that do have to be sold. Evidence that ingenuity and a willingness to take on more risk is not scarce yet.
In this San Francisco Chronicle article, there’s a reference to the lender accepting a share of future home appreciation as payment. This form of loan was widely offered in England years ago. Yet more evidence that many lenders are ready to rely heavily on risky future appreciation, even from very high prices today, and that still enables the industry to use creative ways to “get you into the house” at any price, no matter how high.
