I know you guys aren’t “hating” on me, but you are having a little fun. I’ve been around here for a while, just not posting under this name. Its sounds incediary when stated like this, but the industry will be regulating themselves. The loans on their books are much riskier than previously understood. Rich has said that the credit tightening will influence the fall of the market and its timing much more than interest rates. Consider this a possible insight to the way the tightening will go.
Many here cry data! data! and wonder why there isn’t more. That is because the big lenders and mortgage giants aren’t divulging what they know. Why should they? Private investors can have fun making spreadsheets of MLS listings and their individual decline, but the industry giants have CRADLE TO GRAVE information on every loan that they have EVER originated, serviced, pooled, sold to secondary investors, or are part of their MBS securties. Millions and millions of loans. Billions and billions of dollars. When we say the market is overvalued, that means the assets they are holding are not valued properly–this is a huge disconnect and heads will roll. This hasn’t been a real estate bubble as much as a credit bubble. Of course they are going to take action. It just will be sooner, rather than later.
So, get the popcorn ready. 2007 will be an interesting year for schadenfreude.
