What happened to the mortgage industry?
I’ve never been a verbose writer. I took a high level Shakespeare class during my last semester in college and the professor wrote on my final paper – “You understand quickly, you write even quicker.” I asked him what his comments meant and he said, when you write, you get right to the point.
Here’s my view of what happened to the mortgage industry. (If you want a more verbose, simply google Mortgage Collapse.)
The subprime mortgage world has fallen flat on its face. Loaning money to people who have proven that they can’t pay back a credit card let alone a mortgage was bad business. These loans started off with a 2 year introductory rate and now we’re seeing those two years expiring and now we’re getting into the adjustment phase. The mortgage entities that bought these loans are filing bankruptcy en masse. As as a result, borrowers who need these loans can’t get them anymore. The effects of these loans are moving up the risk ladder with “ALT-A” companies (the risk level between PRIME and SUBPRIME) starting to close their doors as well. It’s a mess right now and it may take years for all this to get straightened out.
Here are two videos worth watching regarding the mortgage mess:
Jim Cramer (rather calm):
Jim Cramer (going ballistic):
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Tagged with: mortgage • prime • rate • Subprime • va
Filed under: mortgage
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Smell some more of that coffee folks and ask yourself. Wwhat started this whole mess in the first place. It was the government regulators who steped in and imposed regulation which shut off the flow of dollars to the subprime market. They went in with their oh so common finger pointing and blame techniques. They did this to us and convinced us all under the guise of “predatory lending, Fraud” and ohhhhhh, dont forget “High Foreclosure Rates” When in fact the exact opposite was true, mortgage backed bonds , the industry and the housing market as a whole was making plenty of money. Tell me, do you see a problem with a very low 1-3% foreclosure rate in an up trending real estate market, a market in which the value is more than the foreclosed loan amount? Or in comparison to a trillion dollar mortgage market where huge amount’s of profits are being made by everyone? We now have, so like the like the democrats, the government throwing billions dollars away thinking that they can fix the problem they caused, I think NOT! The government regulators only goal was to pop the housing bubble and to take control over the entire trillion dollar mortgage market through FANNIE AND FREDDIE MAE and FHA. I ask, doesn’t that sound like fun to have these same people in control of the market? It is the government regulators who are not only Predatory but Fraudulent and Reckless in there control over the mortgage lending market. Their interventions and action’s have cause this self fulfilling prophecy, they will only burn the place to the ground if people don’t wake up and put a stop to it. It is because of their reckless and fraudulent actions that a lot of good educated people will wind up paying the price. Learn to read between the lines people and stop allowing the Government to protect you from yourselfs. I say the feds need to drop the rate by 1bbs but no….they step back and wont do a damn thing!
What exactly will dropping the (i’m going assume you mean the PRIME rate) rate do for everyone?