The clue to the future of this bubble is to look at who’s still making money amidst all of this, or who is making even more money now. I see it among hard money lenders in small business and real estate. These guys couldn’t compete with no doc loans and low interest rates before. Now, they’re making 18% – 33% on collaterlized loans!
Hard money does not care about your FICO score. They barely care that you have identification, they just want good collateral. It’s only a matter of time before the big banks want in on the action. I think the next hot credit product is the No-FICO 75% LTV loan on real estate, jewelry, retirement fund and even your wages. Not sure how this would work? Go to your local pawn shop.
Banks will charge horrific rates, yet people will eat up this new credit like teenagers at a buffet. It either re-inflate the fizzing bubble we have now, or create a whole new one.
