Egggg yolk, what is going on with the viewers
of the tube!!!!
Let me 1st introduce myself as Tyler and I’m
the host of the crypto channel that others
in the space take a first glance of and think
hey, that’s an easy channel to make fun
of, let’s take it on, kind of like these
two unfortunate quarantine thieves robbing
the wrong house….you know our home defense,
it’s time for Chico Crypto!
Well, I’m sure if you clicked on this video,
you were a little shocked at the title, Buy
a home with just a single BTC?
Well, that isn’t going to happen in the
next couple of months, in 2020, but it’s
highly possible during Bitcoin’s next peak
which I predict to happen in 2022.
Why?
Well, we are on the cusp of the popping of
the next housing bubble, the housing bubble
2.0 which has been inflating non stop since
2008.
Now everyone knows 2008, it was the start
of the great recession, where asset prices
across the board, came back to reality and
came back quick.
And this was mostly due to the popping of
the mid-2000s housing bubble.
As we can see, from the U.S. National Home
Price Index, homes surged nearly 80 percent
from the year 2000 to the peak in 2007, just
before the crash.
Well, during the crash, which lasted from
2008 to 2012, the home index lost about 22
percent.
Well, homes...they bounced, and since the
bottom in 2012, another massive surge, gaining
59 percent in price value on average since.
So why is this a bubble?
Like nearly all artificial booms, the U.S.
Housing Bubble 2.0 has inflated faster than
the underlying fundamentals.
As the chart below shows, U.S. housing prices
have been rising much faster than overall
inflation, rents, and wages, which is exactly
what happened during the last housing bubble.
And everyone knows what happened last time,
there was a rush from lenders to give loans
for these overinflated homes to people, whose
wages weren’t inflating, and thus any downturn
in the economy meant they could not pay back
their mortgages.
As the mortgage finance market expanded, it
attracted droves of new players with money
to lend.
“We had at least a trillion dollars coming
into the mortgage market in 2004, 2005 and
2006,” That’s $3 trillion dollars going
into mortgages that did not exist before & a
majority of these loans were shat... given
to people with no assets, weak jobs, and low
incomes….aka subprime mortgages, and by
2006, nearly 25 percent of any new home loan
originated was subprime.
But now here we are, 12 years since the 2008
crash.
And the more things change, the more the more
they stay the same.
Housing is once again inflated to beyond belief,
and breaking away from the normal rise of
things like overall inflation, wages, and
rent.
It looks very similar to 2008.
But are lenders, giving out subprime mortgages
again?
Yes and No.
They are giving out homes to people with Bad
Credit again, but they aren’t called Subprime,
they are called Non-Prime, Non Qualifying
or Non-QM
It’s not as willy nilly, silly vanilly as
2008 though.
In 2008, a person could get a subprime mortgage
with a 500 credit score, which puts them into
the poor category, and a very high risk loan.
The average credit score for a nonqm mortgage
is 630, though someone with a 580 credit score
could qualify if they had a 30 percent down
payment.
So not nearly as risky, but if these people
in the non prime category lose their jobs,
they will default and not be able to pay back
their mortgage.
And as we know, unemployment claims have surged
like never before, literally going off the
charts, outdoing the last crash by nearly
10x.
Peak for the highest week in March of 2009,
was just 695 thousand.
Peak for the week ending March 28th 2020,
over 6.6 million.
And you know what is funny?
Since 2014, home loans have fallen into 2
categories, qualifying and the non qualifying
we have been talking about.
The big government lenders, like Fannie Mae
and Freddie Mac, they were supposed to not
be allowed to lend non qm, under revisions
made to the Home Mortgage Disclosure Act….but
like always they find a loophole….
How the language is written, any mortgage
that is backed by either of the government
sponsored enterprises, Freddie or Fannie,
automatically becomes a qualified loan, even
if they have the properties of being non prime
under an arrangement known as a 'patch'.
And here is the thing, with the government
sponsored entities, they guarantee 50 percent
of the US housing market, 5 trillion dollars.
In 2018 alone, mortgage loan origination volume
from the GSEs was estimated to be about 1
trillion dollars in the US.
Out of that trillion, 260 billion of 2018
mortgage loan origination volume would have
had to have been originated as a non prime
loan, as they did not meet the standards to
be QM-eligible.
26 percent of all government backed loans
in 2018 were non prime.
They were GSE Patches.
But the savior, the government is coming to
save these non primers right?
Well yes, they are.
You know the CARES, act, which was passed
because of the pandemic right?
Under this, Borrowers with government-backed
mortgages, through Fannie Mae, Freddie Mac
are entitled to a loan forbearance plan under
the economic recovery plan.
They can miss up to one year of payments,
which will then be added to the back end of
their mortgages.
Why did they do this?
For American citizens?
Nope to save the goddamn government.
Remember that Home Mortgage Disclosure Act
in 2014, it also had something else written
in it.
The Repay Requirement.
Under this regulation it is the responsibility
of the lender to make sure that the borrower
has the ability to repay the loan and that
the documentation complies with a set of requirements.
It is the lender’s responsibility to make
sure the documentation is in order and if
they themselves default – the borrower can
sue and be awarded penalties if it is not.
And there is a such a probable chance that
the GSE patch mortgages, non prime, will default
as some of the borrowers won’t have a job.
Do you think the government wants to be sued
by the borrowers?
So for one year, there is a buffer where GSE
patch defaults most likely won’t happen.
I wonder why they chose the year mark?
Because at the end of 2020.
January 2021, the GSE patch expires.
It was a temporary measure….so by the time
the citizens have to start paying back their
mortgages, these loans will be classified
as non QM, which is BAD news for the borrowers,
when they have to start REPAYING them, losing
many of the protections like excessive points
and fees on their mortgage.
But you know what?
The government and treasury knows, Fannie
and Freddie hodl a bunch of shat.
On February 3rd, before the crisis hit home,
the Federal Financing Housing Agency, FFHA,
announced the hiring of Houlihan Lokey Capital,
as a financial advisor to assist in the development
and implementation of a roadmap to responsibly
end the conservatorships of Fannie Mae and
Freddie Mac.
Ya the government doesn’t want to own them
any more and this plan was created by the
Treasury Department, led by Snoochie boochies……
In september of 2019 and the document is titled,
US Department of the treasury, Housing Reform
Plan.
So the government doesn’t want to be on
the line, for the flurry of foreclosures that
could happen, if this is extended for any
amount of time.
But foreclosures are coming, not from the
GSEs, we may have to wait for some time.
But from the non qualifying market of which
patches weren’t made for.
Why do you think, on March 23rd Housing Wire
put out this article, DID NON QM just disappear
from the market?
And in it they cover all the Non QM lenders,
suspending their lending programs.
You know why?
They don’t get the CARES act protection,
of borrowers getting to delay their mortgage
payments for a year.
They gotta pay.
And guess who falls into this category of
NON QM ready to default?
AIR BNB Superhosts, both foriegn and american,
who are overleveraged and have nobody to stay
in their places.
In my opinion, highly leveraged Superhosts
will be the first domino to fall that triggers
a housing bust this year and into 2021.
These superhosts usually build an extensive
housing portfolio built on non qm loans as
real estate investors have to get this type
of loan.
And guess what?
Investors don’t get the repay requirement
rule, where if they default they can sue,
usually because they flip the homes they buy
quickly, or they rely on rental income to
repay the mortgage, aka AIRBNB income.
These are the risky sons of bioteches, and
they are far and wide.
Statistics put AirBNB properties as of 2020
in the US, at 660,000.
According to analysts, at least 50 percent
of these are controlled by the Superhosts.
That is at least 330 thousand properties….
And as of 2019, there were at least 8 million
mortgaged homes in the US.
So if everyone of the 330k superhost homes
were leveraged, that means 4.125 percent of
mortgaged homes in the US are ripe for a bust
just from one web application.
AirBNB.
Now I know, not everyone falls into that category,
but you get the point, it’s a domino, and
ready to fall.
So when I say buy a home with a Bitcoin, I
don’t mean this year, it’s going to take
some time.
It took from 2008 to 2012, for home prices
to reach their bottom.
We are at the cusp of the housing market crash,
and I’m not going to try and predict the
bottom, but from the way the Treasury is looking
to get rid of Fannie Mae and Freddie Mac by
2021 or sooner, I would predict sometime in
2022.
And that is when Bitcoin, may be hitting it’s
next peak.
Cheers I’ll see you next time!
