Weiss Ratings Voiced Concern Over Crypto-Backed Mortgages Amid Market UncertaintyWeiss said Milo’s plans sound similar to pre-2009 lax regulation and easy credit environment, and investors in financial stocks should be careful.
“It’s an interesting strategy … but given current market conditions, investors should be skeptical, especially with financial stocks,” theWhen the housing prices were on the rise, homebuyers were able to refinance thanks to easy credit and insufficient regulation. The strategy worked fine with everyone, including the bondholders, getting paid.
The Weiss Rating report noted that Milo offering digital-assets-backed mortgages that even forego the down-payment sounds familiar to the pre-2009 situation.“Many economists see parallels … and investors need to see the bigger picture of how this impacts the financial industry as a whole,” it reads.Homebuyers have been paying high prices, thanks to the Fed Reserve’s cheap money policies over the past several years.
When the interest rate increases, homebuyers’ monthly installments will rise by hundreds of dollars. It will result in a fall in home prices as the number of home buyers will drop. And this is when the Milo strategy might meet with the most serious challenge.
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