It's Official: CNN Says It's A Bubble

Shaheen Pasha, a CNN/Money staff writer, says in a story today that new guidelines for exotic mortgages might make it more difficult for many homebuyers to qualify for loans. As a result, speculation is that air could be let out of the housing bubble. But, whoa! Wait! They phrased it as though it's a fact that there is a housing bubble. Check out the story at this link. Here's an excerpt with the critical portion in bold:

NEW YORK (CNN/Money) - With the popularity of exotic mortgages, it's never been easier for homebuyers to afford their dream house even if it's out of their preferred price range.

But the increasing use of interest-only and option adjustable rate mortgages has put federal regulators on high alert. This fall, the Office of the Comptroller of the Currency, along with other financial regulators, will issue guidelines for mortgage lenders that could make lenders think twice before readily offering exotic mortgages to potential buyers.

Will the inability to gain easy access to these creative mortgage products finally help let some of the air out of the inflated housing bubble?

It's certainly a distinct possibility, said Andy Laperriere, managing director at ISI Group, a research firm.

"I think it will affect a meaningful amount of loans," he said. "It'll be enough to take the marginal buyer out of the hottest markets and therefore slowdown or even stop some price appreciation."

— The Boy in the Big Housing Bubble