The Arizona Star reported that First Magnus halts loans. Falling prey to the mortgage debacle that is effecting availability of home loans across the nation. Its getting ugly out there. It looks like everyone is panicking about the sky is falling. We went through similar in the 1980’s with S&L’s closing. Pygmalion effect is at work. If enough of the herd believe, it becomes reality. Spook one and the whole heard panics, changes direction in a mad rush, and trample the weak or less fortunate.
A friend explained it in layman’s terms. When people feel there is a dollar tomorrow to replace the one the spend today, they will spend it. If they feel that there is no dollar to replace it, they hold on to it. That is what is happening on a much larger scale. The secondary market for mortgage loans is in a panic that they may lose money. Leaving primary lenders with loans and no money to replace them. There is money out there, it just isn’t moving.
The wheel is grinding toward a halt. I say, get the wheel turning again. Stimulate the housing market to support the economy. Stop the panic. Those who live with negativity are miserable and drag the rest with them. Enough doom and gloom. Lets see some positive news. Lets report on the positive side. Lets stimulate a market that will impact on everyone. Kinda like the movie Play It Forward. Go out and spend that dollar to get the wheel turning.
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