San Diego Housing Market News and Analysis
User Forum Topic
Submitted by Stripes on April 17, 2017 - 10:02am
Any guesses on how common securities-based loans and lines of credit are in high end housing in San Diego? It sounds like they are nothing new, but increasing in popularity. I could not find anything by searching these terms, but if already discussed, please send me the link!
From Kevin Dugan of the New York Post today:
Financial insiders are getting increasingly worried over the popularity of securities-based loans, or SBLs — a risky form of debt marketed to wealthy investors who typically use it to buy big assets like houses.
The loans, which are taken against pools of stocks and bonds, offer borrowers cheap money fast without having to sell their underlying securities — an attractive option when the Dow is rising.
But if markets crash, brokers can unload their clients’ holdings at fire-sale prices — and go after the house to cover the the vig.
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