Subprime Then and Now

 

I hate to piss on FHA's parade but a 580 credit score is shit.  Smooth talking ass clowns like Atwater and Clinton be damned.  FHA, Fannie Mae and Freddie Mac have been the dumping ground for total shit mortgages made to people who have little to no financial discipline.  They are going to default and in record numbers this time.  Housing cheerleaders have been saying that this real estate bust will not be as severe as the bust in 2008 - 2009.  I think that it will be worse.  The underwriting for those mortgages has been total shit and standards were lowered so that politicians could pander to the type of "citizen" that votes for them - translation, life's losers.  These are people who you would not lend $20 to much less hundreds of thousands of dollars spread out over many decades.  You can literally have a shitty 580 credit score and put down 3.5% on an overpriced shack in a craptastic city and get fixed rate funding for the difference.  This market is going to slowly go "tits up" in the next several months.  The Fed is fucked and it knows it - they bought sooooo much mortgage backed paper at nosebleed prices funding all of these "Great American Citizens".  LMFAO.