So during the last real estate crash, lenders became landlords? Were mortgages sold on the secondary market back then? I wonder if some of the mortgage holders today could become landlords if they wanted to. Take a pension fund that holds some MBSs for example, are they allowed to hold rental property? Would they even want to?
I also wouldn’t read too much into HLS’s statements. The tightening of the mortgage market has just begun. Sure some people can still get loans. But, there’s fewer people that can get loans this month than there were last month and there will be even fewer people who can get loans next month. The bubble took time to expand and it will take time to deflate. The stock market bubble of 2000 didn’t fully deflate until 2003, and we all know stocks are much more liquid than homes.
I don’t think we’re going to see a political bailout either. It does not appear that Bush is going to raise Freddie’s and Fannie’s conforming limits. So the Congress can pass all the bills they want, but if Bush won’t sign them, the limits won’t be raised.
