patrick.net

Foreclosures have actually increased over the last 6 months, not decreased:

http://www.doctorhousingbubble.com/bad-bank-model-bofa-7-charts-us-housing-market-option-arms-win-worst-performing-loan-7-million-distressed-loans/

"Judicial foreclosure states recorded the most severe drops in foreclosures," said Sharga.
Nothing like some procedural issues to help with extend and pretend.

it's actually the low end areas that haven't bottomed yet because there's too much inventory.

The market that I live in is pretty healthy. With most decent houses selling in less than 30 days that's not a recipe for further price declines.

I just noticed that 1128 Victory Lane appears to have been foreclosed for under $200k in December 2010. I'm not suggesting new lows, but it does seem like deals can still be had at the courthouse steps. Will be interesting to see if flipper margins are still there. Can anybody comment on the nineties downturn: do market dynamics at the bottom allow for both flippers and longer term (rental) investors? Or do flippers need to be driven out by low margins before we can turn the corner?

EBGuy says

I just noticed that 1128 Victory Lane appears to have been foreclosed for under $200k in December 2010. I’m not suggesting new lows, but it does seem like deals can still be had at the courthouse steps. Will be interesting to see if flipper margins are still there. Can anybody comment on the nineties downturn: do market dynamics at the bottom allow for both flippers and longer term (rental) investors? Or do flippers need to be driven out by low margins before we can turn the corner?

The investor dynamic in the mid 90's was different than the current investor dynamic.

In the mid 90's, the purchase model for an investor was positive cash flow only. No consideration was given to the idea of future price appreciation.

Currently there are several subsets of investors:

-The classic positive cash flow investor. I tend to think someone like the poster "robertarias". This I believe is the smallest investor subset at the moment.
-The guy trying to beat the stock market. This guy is bright enough to know that the stock market is in a huge bubble. But he is also dumb enough that he made future plans based on a certain return and now can't get that return in anything without risk. So he buys a property to rent out. Unfortunately this guy nearly always has a mindset of "ZOMG so cheap". If I rent it out at a 6% return, ZOMG I'm doing better than a CD.
-Conglomerates. I honestly don't know much about these. I'd imagine very very ripe for fraud.
-Foreign investors. These guys seem to be going bonkers for property in really depressed markets like Vegas and Phoenix. There are seminars in Australia, China, Japan, Canada, touting the RE in depressed areas of the US. Kinda like the Armando Montelongo things. Future price appreciation is almost always a huge component of the seminar.

Anyway, bottom line is that in the depressed areas, the classic positive cash flow investor is gonna do fine(provided government handouts/section 8 continues in current form). But the guys counting on future appreciation?.....what happens 4 years down the road if the stock market booms. And all these guys have their money tied up...after years of property taxes, paying to fix up the mess their tennants made...etc? Continued oversupply as they look to cut losses and bail.

You go look at any decent house in the san fernando valley and you will realize that most "good" homes all have multiple offers at this point. If you're FHA, slim chance of getting in because 20%down and cash rules. That's just the fact. Nobody is overpaying, or going over asking price, but buyers are there and are buying. Many people have realized that it is actually time to buy. Not in a panic way like "this month or never" but we have arrived at the point where you gotta step up if you want to buy and can afford it. If you cannot afford it then that's not enough reason for the market having to crash further - you just can't afford it and should spent less time on the forum predicting world apocalypse but work harder, save more money until you can afford a house that works for you.

We just found out that our new neighbors of the house we bought are tenants - slightly smaller house than the we bought and they pay $2800/month in rent...more then we pay to own - NO BRAINER.

Disclaimer: I don't know how houses in the 300k range are doing...I am talking San Fernando Valley, south of the Blvd or close to it, Encino, Tarzana, Woodland Hills, Sherman Oaks house prices range 480k-750k

SubOink says

Disclaimer: I don’t know how houses in the 300k range are doing

I do,. they are tanking and IMO so will the 500K-750K homes by 20 percent in less than 2 years. is renting really that bad of an idea? or is the greed keeping people awake at night. the Ego loves a deal I guess?

a fool and his money will soon be parted but at least the Va jay jay is happy! ;-)

Katy Perry says

SubOink says

Disclaimer: I don’t know how houses in the 300k range are doing

I do,. they are tanking and IMO so will the 500K-750K homes by 20 percent in less than 2 years. is renting really that bad of an idea? or is the greed keeping people awake at night. the Ego loves a deal I guess?
a fool and his money will soon be parted but at least the Va jay jay is happy!

You seem confident in your prediction. So prices will fall EXACTLY 20%. Ok. Uh huh. Are you SURE they won't fall 18%, or 17.4%? Or maybe just 10%? Do you have a crystal ball?

If you are so confident that prices will fall 20% - then put your money where your mouth is and short the appropriate stocks that would reflect such a drop. You can probably short the entire index because if prices were to fall 20%, then none of us will have a job anymore and things will be so bad that you will not buy a house even then. Be careful what you wish for. YOU won't make out any better in this than anybody else if such a scenario was to happen because that money you are putting in the bank right now will be WORTHLESS. At least I have a house, an asset with actual value because you have to live somewhere.

You beat me to it.

Gottfried is also famous for his "tasteless" jokes about 9/11 within days of that event. I personally think people are way too sensitive, but I can't blame Aflac for firing him.

SubOink says

You don’t need to prove anything was wrong because you obviously can’t.

No, that's only obvious to ducks and pigs like you. I already proved him wrong numerous times before, and, he never really answered most of my posts directly. Usually, he either weasels out of every situation or comes up with some BS data which is either out-of-date or just plain wrong. Here is another link where I proved him wrong, and he hasn't had the balls to answer me, either:

http://patrick.net/?p=528285#comment-723695

dodgerfanjohn says

Currently there are several subsets of investors:

You forgot the neutral cash flow investor like me. Let the tenants pay off the mortgage in 15 years then take all the rent minus upkeep. Take the depreciation allowance against my current high tax rate. I don't care if the house goes up or down since I won't be selling it. I just want future cash flow after retirement when I will be in a whole lot lower tax bracket.

dunnross says

No, that’s only obvious to ducks and pigs like you.

So now I am a pig. I guess it takes one to know one. Or maybe you are just an angry renter. I get it. I used to be an angry renter myself. Frustrated with the world. Looking at negative news with delight and ignoring any slight sign of positive news because it didn't fit into my angry renter world. Then it crashed, then I could afford it, then I bought. You should do the same.

dunnross says

Yes, but he cherry-picked the dates

He picked the peak price in CS and the most recent CS data available. That's the worst case scenario using CS numbers...

klarek, you have to admit you fit the angry renter stereotype to a T.

1) pissed off at homeowners...check
2) pissed off at anyone who has strategically defaulted...check
3) generally seem frustrated with the world...check
4) look at negative news with delight...check
5) ignoring any slight sign of positive news because it doesn't fit with your angry renter world view...check
6) try to convince others not to buy with the hope that it will help prices come down...check.

I'm not sure what other elements there are to an angry renter, but I'd bet you possess them too.

ch_tah says

klarek, you have to admit you fit the angry renter stereotype to a T.
1) pissed off at homeowners…check

2) pissed off at anyone who has strategically defaulted…check

3) generally seem frustrated with the world…check

4) look at negative news with delight…check

5) ignoring any slight sign of positive news because it doesn’t fit with your angry renter world view…check

6) try to convince others not to buy with the hope that it will help prices come down…check.
I’m not sure what other elements there are to an angry renter, but I’d bet you possess them too.

ch_tah says

klarek, you have to admit you fit the angry renter stereotype to a T.
1) pissed off at homeowners…check

2) pissed off at anyone who has strategically defaulted…check

3) generally seem frustrated with the world…check

4) look at negative news with delight…check

5) ignoring any slight sign of positive news because it doesn’t fit with your angry renter world view…check

6) try to convince others not to buy with the hope that it will help prices come down…check.
I’m not sure what other elements there are to an angry renter, but I’d bet you possess them too.

Same argument could be made for all you angry used-house-owner out there, as well:

1. pissed off at renters for not having their equity disappear overnight...check
2. pissed off at prudent savers for not buying and bidding up the price of their prized possessions...check
3. pissed off at fence-sitters for not jumping off their fences and propping up their open-bust of a housing market...check
4. look at even the tiniest spec of good news, no matter how ephemeral it is with their tongs hanging out...check.
5. try to convince others to buy no matter how ridiculously overpriced and not supported by any fundamentals.

Good old realtors pumping the news up the market to keep the balloon party going.

The way that article is written it is very biased toward a conclusion which is not necessarily supported by the data. But the word choices are very biased. I live in CA, still a bubble here and with budget problems this state has I'm expecting a lot more prices falling since government can't get their budgets balanced without increasing taxes.

Since when is RealtyTrac a 100% accurate source? They buy their data from other parties which is not guaranteed to be accurate representation.

After donating to red cross to help Japanese we are now thinking of investing into Japanese companies too.

We might invest into TM. Anyone has any specific recommendations on other companies out there? I think investing into companies that will handle buildings would be a wise choice at this point. TheOakMan any symbols you would recommend?

ch_tah says

klarek, you have to admit you fit the angry renter stereotype to a T.

Fitting the stereotype of the euphoric, status-upgraded debt-owner. You're no different than the fools who bought in 2005, patting themselves on their backs while speaking condescendingly to "bitter renters".

1) pissed off at homeowners…check

Nope.

2) pissed off at anyone who has strategically defaulted…check

I think they're deadbeats, but I'm not pissed at them until taxpayers have to foot the bill for their greed.

3) generally seem frustrated with the world…check

Wrong. Generalized statement is generalized. And dumb.

4) look at negative news with delight…check

A correcting bubble isn't negative, it's positive. Only delusional fools leaping into a bull trap would call that negative.

5) ignoring any slight sign of positive news because it doesn’t fit with your angry renter world view…check

I'm pretty patient. Positive news is fine if it's not the result of market manipulation. When retards fall for it and somebody points it out, the only rational way to ingest this is for said retards to assume that the realist hates good news.

6) try to convince others not to buy with the hope that it will help prices come down…check.

a) convince people not to buy an overpriced house to preserve future wealth
b) by convincing ten people to not buy now, I have forced prices downward

If you believe b) over a), then you're a certified fucking idiot.

I’m not sure what other elements there are to an angry renter, but I’d bet you possess them too.

I'll help you out: 7) not mathematically retarded

You can deny it all you want now, but your previous posts suggest otherwise. Actually, re-reading your post, you don't really deny the points except for #1.

ch_tah says

You can deny it all you want now, but your previous posts suggest otherwise. Actually, re-reading your post, you don’t really deny the points except for #1.

I figured a more thoughtful retort addressing each point would better explain how you're wrong than just a bland denial, but I have a tendency in life to overestimate an audience's intelligence. I should have known better and dumbed it down, considering you're using the tired "bitter renter" cliche. People like you lack any self-awareness.

klarek says

ch_tah says

You can deny it all you want now, but your previous posts suggest otherwise. Actually, re-reading your post, you don’t really deny the points except for #1.

I figured a more thoughtful retort addressing each point would better explain how you’re wrong than just a bland denial, but I have a tendency in life to overestimate an audience’s intelligence. I should have known better and dumbed it down, considering you’re using the tired “bitter renter” cliche. People like you lack any self-awareness.

You addressed each point, but didn't deny any except for #1. #2 taxpayers do foot the bill, so you are angry. #3 you just say is dumb, but it's probably true. #4 you spin it to be positive, but if you are rooting for our economy to go down, I would call that looking at negative news with delight. #5 you write off any positive news as manipulated, so you essentially ignore it all. #6 whenever someone asks about buying you say buying now would be stupid in hopes of convincing them not to buy.

In any event, no one said "bitter" renter. I said "angry" renter. If you had a nickel for every F-bomb you threw on this site, you'd be able to buy a very nice house right now, even at these "elevated" prices. As I said before, you fit the description of an angry renter well. Careful about getting angry about being called an angry renter, you might find yourself in a perpetual loop.

ch_tah says

You addressed each point, but didn’t deny any except for #1.

Your accusations about being frustrated with the world and with reality were ridiculous. Of course I deny them. Addressing them was an explanation WHY they were silly, not at all an admission that there's bitterness involved.

ch_tah says

#2 taxpayers do foot the bill, so you are angry.

Not necessarily. A lot of these loans to the banks were paid back, their lost capital will diminish their profits for years to come. I'm rather indifferent about this.

ch_tah says

#3 you just say is dumb, but it’s probably true

It was a really dumb remark, lacking context or a citation. I'm just living life like everybody else. The world treats me just fine.

ch_tah says

#4 you spin it to be positive, but if you are rooting for our economy to go down, I would call that looking at negative news with delight.

I want unemployment to decrease. I want real GDP amongst the middle class to rise. I want our country to not drown in debt. Rooting for undue increases in a bubbled real estate market is at best an obstacle to these goals and at worst an impediment. You just have an extremely simplistic view of what you believe "the economy" is, and where you expect it's measure of strength to be shown (in your supposed equity).

I believe houses for the most part are overpriced. You on the other hand made a snap decision to buy based on the so-sophisticated "I've waited too long" analysis, and are thus tying your expectations to a thoughtless purchase. Therefore based on my view, your decision, and your yardstick for economic improvement, you're pissed that housing prices are resuming their downward trajectory, which I told you they would. I don't take any delight in what was inevitable.

ch_tah says

#6 whenever someone asks about buying you say buying now would be stupid in hopes of convincing them not to buy.

I don't think I have said it like that, at least not since 2008. I say it's risky, that the market is a bull-trap, that prices have not bottomed at a fundamentally-supported level on their own, so there's no reason to believe they'll increase on their own. You dismiss these points, for whatever reason. Beyond the frustration of you not getting it, my only point would be to adequately warn somebody who has had sunshine blown up their ass by a realtor or other market cheerleader. I'd rather people not get screwed. Your implication that I'm trying to make prices fall is absolutely ridiculous and pathetic.

ch_tah says

If you had a nickel for every F-bomb you threw on this site, you’d be able to buy a very nice house right now, even at these “elevated” prices.

A nickel for every f-bomb, an f-bomb for every extremely asinine remark coming from folks such as yourself. I actually don't swear that often on these boards, once or twice here or there, but apparently it offends you. My bad.

ch_tah says

As I said before, you fit the description of an angry renter well. Careful about getting angry about being called an angry renter, you might find yourself in a perpetual loop.

Do you think that if I just bought without hesitation or thought I'll be swept away to the blissful world of equity, unicorns, and rainbows? Is that how it works?

A perma bull or A perma bear will always be right 50% of the time long term and more than 50% right short term depending on whether its a bubble or bust. Just like a broken clock is right two times a day. A perma Bear is right every contraction..doesn't make him a better predictor. You can judge a persons prediction ability by how good he is at prediction BOTH expansion and contraction.

Mr.Fantastic says

I don’t get the angry renter stereotype.
I’m a home owner, and I’m still pissed that tax payers have to pay the bills for deadbeats like CL who bought a house they could never hope to afford under normal circumstances.

Living in your parents' basement does not make you a homeowner.

There's a difference between angry renters and renters. Klarek seems to be an angry renter, pissed at the world, although he has a different tune for part of today. Everyone should be ticked that taxpayers have to bail out banks. However, I don't see the need to attack CL or others who are defaulting. That was their deal with the bank. Maybe the angry renter stereotype developed because you don't see many homeowners attacking defaulters; it just seems to be renters. You see plenty of angry responses by renters against homeowners too. How many times do you see homeowners complaining about renters or yelling at renters? Rarely, if ever. Stereotypes are usually based on fact - maybe look a little harder, and you'll see it.

I am an angry renter, if "angry renter" means the following:

1) I am pissed at the idiots and thieves who fueled the housing bubble, because it means I cannot buy property at a reasonable price at the point in my life in which I would like to buy property.

2) I am pissed at our government for bailing out these idiots and thieves, because it is a poor use of the very high amount of taxes my wife and I pay each year.

3) I am pissed at our government for making it a policy to keep the housing market inflated, because it is a poor allocation of resources generally (and see #1).

So yeah, I'm an angry renter.

(As a caveat, I am not angry at people for strategically defaulting, as that's the most sensible thing to do once the person is in that position.)

klarek says

LOL @ the new homeowner euphoria. Nothing feels as good as a 30 year debt obligation.

And nothing feels better than realizing that I am going to pay my house of in 15 years because its not more than I used to pay in rent and I was able to save 20% down for this place while renting. I'll be done paying in 15 years. Yes, I am very excited about that. I guess you feel great about having a lifetime rent obligation and being jerked around by landlords - "Mr. Landlord, my sink is stopped up, could you pleeeeze call a plumber??" - Done with that. I hated it. I used to be an angry renter because landlords always sucked. Had to move one time out of the "perfect house" only after a year because they had to sell. ARGH!! Makes you just furious. I actually admit that I have become bitter from renting. So I know how you guys feel believe it or not. And it was so frustrating to realize that I'll never own a house. That's what it seemed like in 2005. Luckily, the tables have turned. My savings account was growing and house prices came down...now we have met and STRIKE.

It's the time of renting that fuels my euphoria as a home owner. Despite the 30 year loan, believe it or not - I feel free!

Just talked to a remodeler, will remod the entire downstairs floor, new hardwood, new kitchen, new windows - My wife and I have such pent up demand for doing these kinds of things from years renting a dump and having to live with the house the way it was (it was necessary...to save up the 20%, gotta sacrifice sometimes when you don't have rich parents)

ch_tah says

Living in your parents’ basement does not make you a homeowner.

This was a common statement dribbled up by RE vested parties beginning and during the bubble which among other things led to the 'greatest recession' and a near meltdown of our nations economy.

In another words, more people should have stayed in their parents house and not purchased and inflated prices so carelessly. We would not be this mess today.

Nomograph says

Move out of your parents house and maybe you’ll understand.

The world is full of pimps and hustlers!

SubOink says

I guess you feel great about having a lifetime rent obligation and being jerked around by landlords - “Mr. Landlord, my sink is stopped up, could you pleeeeze call a plumber??” - Done with that. I hated it.

I guess you prefer footing the bill yourself for repairs, taking time off of work, etc. Cool, but don't fool yourself or attempt to fool others into thinking that you've somehow achieved a less stressful way of living. Responsibility does not translate into less stress. You sound like you're making up reasons for owning when you toss out those lines and it makes me think you bought without understanding the actual merits of home ownership. That, along with "now is the time to buy," as you said above sounds like a little realtor got to your ear and filled your tiny brain with all sorts of empty, false propaganda.

I never said I was a renter for life. I've owned before and will own again. I look at people that pride themselves on ownership with pity. They really don't know what it means or gave any significant analytical thought into the largest purchase in their life. Yet thanks partly to the real estate propaganda machine, they feel euphoric and part of an elevated class, all for signing their name to a bunch of forms.

By your statement above that "nobody is overpaying" based on the list of vague and meaningless market descriptions you offer, it could easily be said by that same justification that nobody was overpaying at the peak of the housing bubble.

SubOink says

It’s the time of renting that fuels my euphoria as a home owner. Despite the 30 year loan, believe it or not - I feel free!

That's exactly how the banks want you to feel. Whatever floats your boat.

deep down everyone here know that owning is preferred to renting. (Why else are you here?)

so nobody is buying this stuff about the newfound freedoms you have with renting.

toothfairy says

deep down everyone here know that owning is preferred to renting. (Why else are you here?)

so nobody is buying this stuff about the newfound freedoms you have with renting.

Both are perfectly viable options. Benefits of renting are risk mitigation and flexibility. The only benefits suboink could say about owning was the freedom to pay for a plumber himself and the freedom of a 30 year debt obligation.

I wasn't knocking home ownership in general - as I said I've owned before and will again - just the stupid lies people believe about why they should own. I find the abundant thoughtlessness that people apply to the biggest purchase of their life absolutely sickening.

thomas.wong1986 says

ch_tah says

Living in your parents’ basement does not make you a homeowner.

This was a common statement dribbled up by RE vested parties beginning and during the bubble which among other things led to the ‘greatest recession’ and a near meltdown of our nations economy.
In another words, more people should have stayed in their parents house and not purchased and inflated prices so carelessly. We would not be this mess today.

Totally agree that more people should have lived in their parents' house. BUT, they shouldn't call themselves homeowners.

So then what are the benefits of owning, Klarek?

I happen to agree with suboink that being able to handle issues yourself is a good thing. Yes, it stinks that you are the one on the hook for the expenses, but the ability to make these decisions is a positive. It's not enough of a positive to go overpay by $100k, but it is one of the benefits of owning.

edit: Not to compare renters to a little kid in a demeaning way, but in some ways they are similar. When a kid wants to buy something he needs to ask his parents for money. When you grow up, you can buy it on your own, but it also comes with the responsibility of a job, etc. Sure, when you are renting, you can call up someone to ask them to take care of it, but when you own you have the ability and the responsibility to do it yourself. It's a nice freedom to have.

ch_tah says

So then what are the benefits of owning, Klarek?
I happen to agree with suboink that being able to handle issues yourself is a good thing. Yes, it stinks that you are the one on the hook for the expenses, but the ability to make these decisions is a positive. It’s not enough of a positive to go overpay by $100k, but it is one of the benefits of owning.

the only benefit is if it is cheaper to own than rent.

Right now ownership is way more expensive than rent which is why most people aren't buying.

ChrisLA says

ch_tah says

So then what are the benefits of owning, Klarek?

I happen to agree with suboink that being able to handle issues yourself is a good thing. Yes, it stinks that you are the one on the hook for the expenses, but the ability to make these decisions is a positive. It’s not enough of a positive to go overpay by $100k, but it is one of the benefits of owning.

the only benefit is if it is cheaper to own than rent.
Right now ownership is way more expensive than rent which is why most people aren’t buying.

Really, that's the only benefit of owning versus renting in your view?

ChrisLA says

ch_tah says

So then what are the benefits of owning, Klarek?

I happen to agree with suboink that being able to handle issues yourself is a good thing. Yes, it stinks that you are the one on the hook for the expenses, but the ability to make these decisions is a positive. It’s not enough of a positive to go overpay by $100k, but it is one of the benefits of owning.

the only benefit is if it is cheaper to own than rent.
Right now ownership is way more expensive than rent which is why most people aren’t buying.

In other words people want to buy but they can't afford to, or banks don't want to loan that kind of money to the eager ones.

klarek says

I guess you prefer footing the bill yourself for repairs, taking time off of work, etc. Cool, but don’t fool yourself or attempt to fool others into thinking that you’ve somehow achieved a less stressful way of living. Responsibility does not translate into less stress.

Footing the bills is not causing me stress. What is causing me stress is when things don't get taken care of because a landlord stalls and sends over 4 workers to get estimates all on my time - not sure where you're time saving idea comes in. I have wasted SO much time by being at the renter house and waiting for the landlord to make a decision to fix something and then ultimately getting the cheapest guy on the block to fix it. I then, had to live with it. I am glad to pay for it myself and get things done the right way, and FAST.

I find it a huge advantage despite paying for it. Hey, life costs money. You go out to eat, costs money, put gas in your car, costs money. You own a home that you enjoy, costs money. Not a groundbreaking concept really.

But when you are renting, you are at the mercy of somebody else. Mostly, somebody else that looks at the home as an investment. Somebody that cares about the return of the investment. You live in that investment, except ...its not your investment - but you are paying for it regardless.

I'd rather pay for the repairs than somebody else's mortgage.

I am not the one that is brainwashed - you are!

klarek says

SubOink says

It’s the time of renting that fuels my euphoria as a home owner. Despite the 30 year loan, believe it or not - I feel free!

That’s exactly how the banks want you to feel. Whatever floats your boat.

Moot point. The banks don't give a crap about how we feel. They just want their money. They don't care if you feel imprisoned by a mortgage or free because you own a house. They could care less.

I could also say...landlords want you to feel like renting is the way to go. After all, that's how they make their money. My last landlord paid $230k for the house 20 years ago. I have paid him $140k in 5 years in rent and btw, this was the cheapest house in this neighborhood I could find. Right now, most houses rent for more than that - So, ooo...I had a deal!! I paid his half of his house off. I feel very good about that. NOT.

bubblesitter says

ChrisLA says

ch_tah says

So then what are the benefits of owning, Klarek?
I happen to agree with suboink that being able to handle issues yourself is a good thing. Yes, it stinks that you are the one on the hook for the expenses, but the ability to make these decisions is a positive. It’s not enough of a positive to go overpay by $100k, but it is one of the benefits of owning.

the only benefit is if it is cheaper to own than rent.

Right now ownership is way more expensive than rent which is why most people aren’t buying.

In other words people want to buy but they can’t afford to, or banks don’t want to loan that kind of money to the eager ones.

I think thats the right way to put it. Poor are always eager to take on debt frivolously, and banks are slowly returning to making prudent loans they know they'll get back because government isn't going to be backing stupid loans any more, at least not to the same extend as before.

ChrisLA says

Poor are always eager to take on debt frivolously, and banks are slowly returning to making prudent loans they know they’ll get back because government isn’t going to be backing stupid loans any more, at least not to the same extend as before.

The government didn't back those loans--they were packaged into MBS and sold to investors. It was Wall Street that was backing them, in effect.