Thursday, March 28, 2013

Why the Bubble Has Set the Stage for Loans4Less.com, Inc. (LFLS)

It was called not only the biggest bubble in real estate history, but the biggest bubble of any kind that has ever happened. It involved not only the U.S., but countries around the world, with the globalization of economic markets feeding the spread. Any time that the market value of something is based primarily upon independent price inflation not tied to corresponding changes in fundamentals, it can be termed a speculative bubble. It’s an occasional though inevitable occurrence in free markets, able to tempt even foundational institutions with the prospect of easy money. But it doesn’t take a serious student of history to recognize that every bubble is inevitably followed by some sort of crash.

In 2003, a healthy rise in U.S. real estate prices began to turn into a boom, with average new home prices jumping nearly 50% over the next three years. Then, in 2006, the inflow of money dwindled, soon turning the other way. By 2008, the outward flow had become a panic, with falling prices eventually leaving close to a quarter of all U.S. homeowners owing more on their homes than they were worth in the market. In some states, thousands of homes were simply deserted as people walked away from mortgages. Finally, in 2012, prices bottomed out, and investors, who had never gone completely away, began to pounce, purchasing and holding property as rentals and waiting for prices to go up, which they are now doing.

With some cities now seeing double-digit price gains, including parts of California, and with mortgage rates still low, the dream of home ownership has come back to life in a big way. Even those who got hit the worst are looking to jump back in. But the loan market today has little in common with that of 2006, based as it is on much stricter credit requirements.

It’s a world tailor-made for California-based Loans4Less.Com, a rapidly growing online mortgage loan brokerage. The company focuses on conforming “A” paper loans, and is actively developing a national Web-based loan origination platform for joint venture and licensing partners. The company is in a unique position, and is highly optimistic about the growth of its target market as housing bounces back, an understandable view considering the company’s total revenues for 2012 increased by approximately 64% compared to 2011.

For more information, visit www.Loans4Less.com

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