Ten years after one of the largest asset corrections in history nearly brought down the entire global financial system, house flippers are making a comeback in a big way. Just ask Eduardo Axtle, a 35-year-old former telecom entrepreneur (which we assume means Verizon store clerk) in Oakland, California, who say that “the floodgates have opened” and allowed him to take out 50 home loans over the past couple of years. But we’re sure Yellen & Co. were right, 0% interest rates for nearly a decade were a fantastic idea.
Per the Wall Street Journal, home flipping volume in the first three quarters of 2016 reached levels not seen since 2007…
…driven by rising home prices and the ability to extract pre-recession level gross profit from flips.
But, of course, like last time around, none of this would be possible without a little help from Wall Street. But, since new regulations imposed after the previous housing collapse restrict the types of home loans that the large banks can make, they had to get creative with structuring and have decided to fund other “online lenders” rather than going straight to the borrower. In fact, JP Morgan recently bankrolled 5Arch Funding of Irvine, California with $60 million.
This post was published at Zero Hedge on Dec 28, 2016.
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