
The conditions that caused house prices to crash far below fundamental values will likely never happen again. During the 00s house prices rose far above any justifiable fundamental value juiced by affordability products. When these products proved unstable, millions of delinquencies and foreclosures followed, and house prices crashed far below fundamental values. In 2012 a house price rally reflated the old bubble back to a new and higher equilibrium price based on record low mortgage rates and stable loan products. In order to gain control of the distressed inventory on the MLS, lenders instituted new loss mitigation programs of aggressive loan modification, also known as kicking the can. If implemented in the future (assuming another unlikely mortgage disaster), must-sell inventory…[READ MORE]