Place yourself back in 2008 ...
Remember how it felt to turn on the news, and have absolutely no clue what you might hear next?
To find out which stalwart of Wall Street would not exist tomorrow?
It felt like chaos.
And Washington responded in kind.
The regulations they passed did a great deal of good, but they also had plenty of unintended consequences.
It made lending money a heck of a lot harder
Suddenly, millions of potential homeowners became “too risky,” and making loans to them became nearly impossible. They were even given a name: “Non-QM."
So, billions of dollars that could’ve been lent to Non-QM’s now were fired into less profitable places, until the entire market came to a standstill.