It isnt 2005, but I seem some simalarities. The BS loans have shifted from Private subprime lenders to Federal Subprime lenders. FHA and Dept of Ag (yah, look it up) loans have replaced the old subprime lenders. 125% LTV, yep. No down payment, Yep. Pressuring appraisers to ‘meet the number’, yep. Artifically low interest rates created by government intervention without regard to the wider costs to the economy, yep. They do a better job avoiding liar loans, but that is prob just a matter of time. Prices are lower now, so the loans prob wont be as bad as the 2006 variety, but that doesnt mean this is a healthy market based on sound lending practices.
It is those unsound lending practices, including the tax credit costing 5-10X the 8k per added house sold, that is keeping housing prices elevated above current fundamentals.
Bad lending / economics keeping housing prices higher than fundamental prices dictate, sounds similar to the bubble years to me.
