ORANGE COUNTY—Many have attributed the financial crisis that started in late 2007 in significant part to fallout from the home mortgage meltdown.  Less well-known is the fact that the very industry that arguably set the stage for the downturn has generated important economic opportunities for certain investors and entrepreneurs. Today, as the market for traditional home loans made by banks and other customary lenders remains constrained, despite the growth of housing sales generally, the market for non-traditional mortgage lending may be positioned to expand significantly. 

A simple comparison of the pre-recession housing market to the current market provides insight on the changing mortgage industry.  Prior to 2008 the landscape of housing looked something like what you might expect in a “normal” economy:  85% of sales were of non-distressed homes with traditional mortgages to individuals, 10% were all-cash sales of non-distressed homes, and approximately 3-5% were distressed sales.  The breakdown in 2013 seems radically disparate in comparison:  only 40% of sales were to individuals purchasing with mortgages, 40% were all-cash sales, 15% were distressed sales and 5% were flips.[1] 

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