Another Housing Bubble?
Date Written: 25/05/2017
Year Published: 2017
Resource Type: Article
Cx Number: CX20802
This is an edited transcript from an interview on The Real News Network. Sharmini Peries interviewed Michael Hundson (author of J is For Junk Economics).
SHARMINI PERIES: What are NINJA loans?
MICHAEL HUDSON: That's the other thing that's changed. What was powering and pushing up prices in 2007 and '08 were loans to borrowers with No Income, No Jobs, and No Assets. As Bill Black has explained, these are largely fraudulent loans. The frauds were the banks. The frauds were the mortgage companies that just faked the incomes of the buyers and would lend for almost the entire mortgage.
Now we only have one kind of NINJA left, and those are students. Student loans have been the most rapidly growing loans in the country. They're now about $1.3 trillion, more than credit card loans, more than most other kinds of loans. Everybody knows that students are not able to earn enough to repay them, because default rates on student loans are going way up. They're not going up on mortgages. They're falling on mortgages home mortgages but they're rising on student loans.