When will this crisis be over and credit get back to "normal"?

Question

NMLS #288478. I am twenty + year veteran of the ups and DOWNS of the mortgage market. I never thought when I started with rates in 'teens, that fixed rates would be in the 3's. We have been through cycles before and this one, while tough is starting to swing back SOMEWHAT. I doubt we will ever again the mis-priced risk of no-doc, low-doc, alt-a loans at Prime prices. I THINK the market has learned its lesson, however, there is SOME sub-prime activity beginning to happen (with SUBSTANTIAL money down and Risk Priced appropriately) now.

Answer 1

I am 15 years in a mortgage busines. I have watched as credit markets have seized up and world governments have pumped trillions of dollars into the banking system. Many of us want to know whether these efforts are working, and when we’ll get back to normal. As for question of when we’ll get back to normal, I don’t think we will get back to normal. For many years, “normal” was to lend money to people who couldn’t pay it back. It was normal for investors to buy packaged loans for much more than they were worth. Until we have another bubble that leads once again to lending madness, we won’t go back to the way things were before.