Opinion: These risk-taking mortgage lenders could trigger the next housing crisis

in #banking5 years ago

The last housing crisis that caused the collapse in the economy is still fresh in the minds of many.

What is bothering some people is we are going to see the same "race to the bottome" we saw a decade ago.

There is another line of thinking that could be the cause of the next economic crisis. Today, we have a greater portion of mortgage lending done by non-banks. This is a concern since the banks strengthened their balance sheets, these other entities did not.

Estimates are that non-banks lenders, 40% of them, did not turn a profit in 2018. This could cause failures if we face a liquidity crisis.

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Oh no, I think we're not ready for another crisis like that

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