Forget about bank doom loop stories over residential mortgages. Instead put the spotlight where it belongs.
Not Residential!
A reader asked me to comment on Peter Schiff: Banks Have a Bigger Real Estate Problem Today Than They Did in 2007.
Banks are more vulnerable to the housing market now than they were in 2007.
Most people in the mainstream will scoff at that statement. They’ll tell you that the situation is very different today. After all, we don’t have a big problem in the subprime mortgage market. We’re not seeing a big spike in defaults. That’s true. The problem is different this time. And it’s actually worse.
So, what’s the problem?
As Peter Schiff explained in a recent podcast, the problem this time is the mortgages themselves.
As Peter points out, a 3% mortgage is a huge asset for the borrower. But it’s a huge liability for the lender. So,
