Mortgage refinance activity may have been the true hidden culprit behind the housing crisis. Refi's were more likely to default than mortgates taken out to purchase a home, mainly because home owners were treating there homes like ATMs through cash-out refi's. 84 % of government sponsored enterprise (Fannie mae and Freddie mac) Refi's in 2008 and 2007 were cash-out refi's. These types of refinances at the time tended to have "sloppy underwriting process"   Between 1999 and 2015. 6% of the Refi's and 4% of purchase loans were more than 180 days delinquent. In 2007, the peak, 16% of Refi's and 10% of purchase loans were more than 180 days delinquent. https://youtu.be/GPOv72Awo68

 

Blake Papalia 

Home Made Real Estate Broker