Subprime Hospital Pass?

So have you watched “The Big Short” movie yet?  If not, and especially if you have friends and loved ones who still ‘don’t get it’, you really should (with them).  It explains the property subprime mortgage instigated GFC wonderfully.

We scan the news everyday to bring you relevant news, particularly that not propagated by the easily accessible mainstream media.  We came across the following from The Wall Street Journal over the weekend and just have to share it, as we are simply amazed not to have read it repeated elsewhere….

“Bonds backed by certain risky single-family mortgages topped $1 trillion for the first time in November, crossing that threshold amid rising warnings for one corner of the housing market.

‘These mortgages are insured by the Federal Housing Administration and typically go to borrowers with small down payments and lower credit scores. Banks have pulled back from issuing those loans and from packaging them into bonds sold to investors.

‘The result: In the first three quarters of 2016, banks accounted for 9% of mortgage dollars originated by the FHA’s top 50 lenders, versus 62% for all of 2010, according to Inside Mortgage Finance. Nonbank lenders accounted for 80% of mortgage bonds backed by single-family FHA loans in July 2016, versus 9% the same month in 2010.”

How do you like that for a transfer of risk from the TBTF (too big to fail) banks to ‘non banks’?  

In a sky quite literally abound in circling black swans, this must surely fall into that category….