One of the words anyone learned from the financial collapse of a decade ago is subprime. So have we learned from this risky business of putting money in the hands of people without any assets or money? No, we have not. Not to mention that the problem is even bigger than it was.
Not to mention that mortgage providers are increasing investments in those liar mortgages. Or ninja mortgages. Ninja stands for No Income, No Job or Assets. I don’t know what you prefer as a name. But I prefer the liar.
So are mortgage providers going to keep all those mortgages themselves? No, they are not. They are simply selling them to investors. Sounds familiar? Yes, it should.
The more interesting question we need to ask ourselves is what will happen? We have more money in risky loans and no one knows who owns the assets.