-Darren HardyIt's a psychology issue, not a finance or knowledge issue. 

The triggers of a recession are irrelevant because the financial cycles are the product of mass human psychology; a self realizing prophecy based the belief of patterns and that what happened in the past repeats itself.

Now, there are downsides to this as well since, as you stated, there are additional carrying costs associated with the loans, and in my personal opinion, a factor that most people don't factor in enough is the psychological effects of the debt.

There is a whole lot of psychology involved with these fears but there are some simple solutions (in theory).

What do you think would happen if you took the time to learn the psychology behind sales and what drives a prospect to you.

I'm scared senseless, but I did use my psychology degree today!

To me that is one of the most obvious psychological tactics (not so positive) that makes people unable to decide rationally.

There is also big opportunity for fraud in any area with subjectivity and opportunity for big gains.Bottom line - valuations on cash-out refis are less reliableAdditionally, lenders like to see "skin in the game" in terms of properties - psychologically, a borrower that is putting down cold hard cash on an acquisition means they have real $ to lose if things go wrong.

I invited a special guest who has sold over 1,000 houses to speak to them not about more real estate techniques but the mindset and psychology of success.

That was the signal we're close or at the bottom of the market from an investor's psychology.