Tuesday, August 30, 2005

Would Your Agent Warn You?

Bruce Bartlett, a senior fellow with the National Center for Policy Analysis and a nationally syndicated columnist, writes about the housing market in Wednesday's Washington Times. As noted here at The Boy in the Big Housing Bubble earlier, Bartlett emphasized Greenspan's warning Friday "that if lenders should perceive greater risk, rates could rise and borrowing qualifications tighten quickly." Bartlett's column focuses mostly on the exotic loan products that have allowed home purchases by many people who wouldn't otherwise have the income level to qualify. He offers some common-sense observations, including one about the National Association of Realtors expression of concern about these high-risk mortgages:
The Realtors' warning is admirable, but it's hard to believe very many real estate agents will go out of their way to warn potential buyers against exotic mortgages if it costs them a sale. So it's really up to homebuyers to be careful about overextending themselves in a market unlikely to keep rising.
I happen to know a couple agents who would warn their clients about such a thing, but I'm afraid I have to agree with Bartlett. There probably aren't too many in this market who would do that. And maybe that's a function of the influx of agents who figured they'd get licensed and get rich quick by selling a couple half-million-dollar homes.

Find Bartlett's column at this link.

— The Boy in the Big Housing Bubble