The speaker warns that predatory lending practices from the 2008 crisis are creeping back, including ninja loans to unqualified borrowers and mortgages for H-1B visa holders without credit scores. Foreclosures tank neighboring property values, a spillover effect that hurts entire communities.
Let's not revive the predatory mortgages that Barney Frank eliminated. So first of all, let's not lionize Barney Frank. The Frank Dodd Act was the single biggest problem we've seen ongoing in the markets. And we know that. They got their legislation, they got their money, they moved on. And God rest his soul, because he has moved on to the great reward, whatever his great reward is. But what they're talking about here are what we loved calling ninja loans. Now, if you happen to watch this video and you're a consumer or a younger realtor, You don't know the ninjas that we used to have. That was no income, no job, no assets. And actually, we should have called them ninja peas. No problem. They could get a mortgage for any reason at all. And in fact, the single best movie I've ever seen about the economic meltdown is the one with Brad Pitt in it that I just forgot because I'm of middle age. Somebody will have to toss it into the comments. It's really good. All I remember is Brad Pitt's in it. How embarrassing is this? Oh, and Somebody else famous. Look, okay, I'm not obviously good for this. Watch that video, but you see the mortgage lenders that were giving loans to the strippers because there was no reason not to. They made a lot of money and then the houses went to foreclosure. What they're warning against here is any of those no-doc stated income loans. And let's don't bring back the mortgages that have crazy adjustable rates. And I totally agree that we shouldn't bring back those predatory mortgages, but I just want to point something out here. And I didn't know it until recently that an H-1B visa holder apparently does not need a credit score to purchase a house. They're also not here permanently. So are we putting our H-1B visa holders at risk by giving them loans with no credit score when the visa program could end at any day, good Lord willing? And if that were to happen, there's a benefit— not a benefit, there's a side effect of people who lose their homes to foreclosure. The side effect is the neighbors. And we really never talk about that in foreclosure world, is that when some houses go down to foreclosure, the neighbors are gonna feel a suppression of their equity as well, simply because foreclosures have negative impact on the marketplace. So this article did have some good insights on that, might be worth reading, particularly if you were not around during the market run-up for the rundown that happened.
