August 2026
Is Today's Market a Repeat of the 2006 Mortgage Crisis?
Frank breaks down three reasons today's housing market is nothing like 2006 — full income documentation, safer loan products, and much lower loan-to-value — plus the one thing the doomers get right about home equity.
Transcript
Hey everybody, this is Frank, your mortgage guy. Everyone is trying to tell us that we are reliving the 2006 mortgage crisis all over again. I've produced loans in 2006 and I've produced loans now, and I'm here to tell you why they're wrong — and the one factor that makes them right. In 2006, I saw stated income loans, NINJA loans, and no-income no-asset loans — loans where the borrower did not even have to put down their employment or their income. Nowadays, all borrowers are completely documented. The second biggest factor that makes us different from 2006 are the loan products being offered. In 2006, we saw an incredible amount of 2/28 ARM loans — fixed for two years with a low teaser rate, then spiking after two years. We saw negative amortization loans. We saw loans stacked up to 100% and 125% of the value of the property. The majority of Americans nowadays have a 30-year fixed loan, and an incredible amount of Americans have loans in the 3% to 4% interest rate range. The third biggest factor is loan-to-value. The average loan-to-value in the United States nowadays is 43%. In 2006, 26% of Americans were upside down on their mortgage. In today's market, only 2%. So what are the doomers right about? They're right about one thing: equity is not a permanent asset. In 2008, borrowers found out the hard way that it can be taken away from them at any moment. In the next video, we're going to talk more about that. This is Frank, your mortgage guy. I'll see you on the next video.