Ed Delgado, President and CEO of the Five Star Institute, delivered the keynote presentation at the 51st Annual William W. Gibson, Jr. Mortgage Lending Institute hosted at the University of Texas at Austin School of Law on Thursday. The two-day conference is focused providing professionals with continuing education in financial services legal practice on topics such as developments from the Texas legislature, foreclosure best practices, mortgage loan modifications, and issues for lenders to avoid.
Delgado’s presentation, titled “U.S. Housing Market Trends: An Insider’s Perspective,” focused on providing insight into the root causes of the housing crisis and recognizing the market indicators which could lead to the creation and bursting of another bubble.
“The patterns we see today in the housing market include some troubling signs,” said Delgado.
Several metropolitan statistical areas are showing home price appreciation in the double digits and housing inventory is extremely tight, troubling for the market to be sure. But it’s unlikely that a housing downturn would be felt on the same level as the crisis of the previous decade. Delgado argued that the safeguards that have been put in place (the installation of the CFPB and tighter credit controls for example) in the wake of the crisis coupled with the virtual disappearance of subprime lending at any appreciable level make it more likely that that there will be microbursts of bubbles in areas where the market is overheating, not the nationwide meltdown that brought the nation to the brink of financial collapse.
“At its core, the financial crisis of the previous decade was fueled by greed and unchecked market exuberance but a different atmosphere and attitude towards lending exists in the mortgage industry today,” Delgado said. “Now the market faces a threat of a different kind. Recognizing the current indicators that could spell trouble is vital to ensuring policies are put in place that protect homeowners.”