Buy Homes w/ only 1 BTC? Housing Bubble 2.0 to POP! - YouTube

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!