
The house price crash and subsequent bubble reflation was heavily influenced by bank policy. Most people assume house prices are the result of market forces determined by supply and demand from individual homebuyers and home sellers. The reality is that policies at the major banks, particularly policies related to delinquency and foreclosure, often become so important that they overshadow the activities of everyone else. Back in September of 2010, I first observed that How The Lending Cartel Disposes Their REO Will Determine the Market’s Fate. Today I want to revisit that post and update it based on what we learned over the last five years. The insane lending practices of the housing bubble abruptly terminated in a credit crunch in…[READ MORE]