[quote=sdrealtor]Not close to as bad, not the same planet, not the same universe. In 08/09 we were dealing with loans from folks that couldnt payback what they borrowed at 0% interest. The existing loans out there are nearly all very high quality. Any future loans made will be also. There is still massive demand for homes from high quality credit folks. What is out of whack at the moment is affordability. This is simply a pricing issue for loans, MBS and homes that will work itself out over the next few years without a crash[/quote]
Thanks.
Yeah, I am guessing that existing loans are fine as people have priced in with very low-interest rates. although I guess the banks that held on to those loans are now losing money?
What I am curious about is how a bank would fund a mortgage at 6% when inflation is at 9%. I guess that the banks are thinking that inflation will drop eventually and the 6% loan will make money?
I am originally from Europe where people do not get fixed loans for 30 years. Precisely because the banks would lose real money if the inflation gets above the interest rate. My sister is concerned at her monthly mortgage going up by ~$500 when she next renews the mortgage (every few years it gets adjusted with her partilar typ eof laon).
