In my country (Norway, though the same principles apply everywhere), there's a huge discrepancy between loans in terms of how much equity you need to put up when getting a housing mortgage.
Some of these private banks here are offering no-down mortgages, putting more and more buyers on the market, which seems to be artificially inflating housing prices. People are buying houses on interest-only loans, and re-selling for a profit when the loan is mature. Normally, I wouldn't think too much of this, but it seems to be becoming a trend.
I wouldn't call these loans subprime just yet though, because a steady income stream is pretty much mandatory, but I feel like tendencies are pointing to the idea that banks might start tapping into the subprime market sooner or later.
Investment banks enjoy these mortgages of course, because they set up mortgage-backed securities and earn tons from collateralized debt obligations, and the private banks earn fees from selling mortgages. I mean, it's only a matter of time before new bubbles arise right?
From the standpoint of someone who rents, if I personally start to fear that a bubble is arising and might burst, what's a good plan of action in order to secure myself financially? Are credit default swaps something to consider on a personal basis, given that you can buy CDSs on obligations you don't really have a stake in? Does anyone even sell CDSs to the average citizen?
Thanks in advance for any and all insight.