Mortgage experts concerned about sub-prime repeat
Jun 5, 2013, 5:00 AM | Updated: 5:00 am
SCOTTSDALE, Ariz. — The jump in Valley home prices and high demand for homes has some mortgage experts concerned.
They say sub-prime mortgages appear to be making a comeback, and that could lead to a repeat of America’s 2008 housing disaster. Valley Mortgage expert Dean Wegner said things are okay… for now.
“The way that lending is now, it’s so conservative,” said Wegner. “Anyone that’s buying a house now, deserves that house. They are more than qualified to make those monthly payments.”
But, Wegner said he is concerned.
“If you see new programs handing loans to people that can’t prove their income, or for some reason normally can’t get a loan through conventional means… if you see these people enter into the market and spike home prices even further, you could definitely see another problem on the horizon,” Wegner said.
And he IS seeing those programs start to become available.
“They come in droves,” said Wegner. “Now we’re seeing one or two a month appear. By the end of the year, we could see another dozen of these products. Who knows what that could lead to.”
Wegner believes banks will make loans with sub-prime mortgages if they are confident they can get their money back. He fears that if banks and mortgage companies aren’t careful, we could see a repeat of the housing bubble and the economic problems of a few years ago.
