The Implications of Dodd/Frank Repeal

[Rick Bassett]

I don't care if you love or hate the current tenant at 1600 Pennsylvania Ave. This post isn't intended to be political.

I am curious to get the opinions of other BPers on what the investing road ahead/climate looks like for us if Dodd/Frank gets repealed, which seems pretty certain, and if corporate tax rates drop as the President has promised they will.

As an investor in many Buy/Hold SFR's I'm interpreting these signals to mean that there may be a potential lucrative opportunity for an sell-off exit strategy within the next several years.

What do you think?

Rick

[Brie Schmidt]

I hope that if it is repealed, banks will be smart enough to keep their own standards of lending similar to how it currently exists.  What I learned from what happened is that the general public is stupid.  My husband and I still get in this argument over what happened.  He says it was the banks fault for offering the loans and being greedy, while I don't totally disagree it was the idiot consumer who bought a $700k house on a teacher's salary because the bank told them they could.  They should have known that they couldn't afford for 75% of their income to go to a mortgage payment.  I assimilate it with being mad at Walgreen's for selling cigarettes, the consumer choose to smoke and purchase them, Walgreen's should not be a fault if they bought them and died of lung cancer.  

It is also going to effect generations.  Anyone over 35 was an adult when it happened.  I think everyone in that age group knows someone who made a bad decision during that time and things went downhill for them.  So I am hoping even if the 80/20 interest only no doc loans are back, they will be smart enough to proceed cautiously.  Anyone under 35 wasn't old enough to really experience the aftermath of what went down, but they are "millennials" who have massive student loans, entry level jobs, and less desire to buy a house in the burbs and live the "American Dream."