Who's to Blame

Real Estate Agent with Frank Rubi Real Estate
I heard Alan Greenspan on Sixty Minutes tonight.  You remember him right?  The former Federal Reserve Chief.  The one who set the interest rates for the economy.  After the terrorist attacks he lowered the rates to one percent or so.  Well the mortgage companies were still charging 4-5 percent.  This was a huge spread for these companies.  They were making a fortune.  This also led to increasing home prices.  People were using their homes as ATM's.  The good times would last forever.  Well guess what, they didn't.  People's income didn't keep pace with rising home prices.  I believe everyone is to blame because they just won't make politically unpopular decisions.  I also believe they won't make the correct decisions now.  I also believe we will get out of this mess and move on.  I bet others have an opinion.
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Comments (4)

Eric Bouler
Gardner Realtors, Licensed in La. - New Orleans, LA
Listening to your Needs

The people that took the loans are to blame. If they cannot do math and figure it out they will be in the hole. Many of them had help listening to loan orig. that tried to fool them while ranking in large commissions. The person just made a bad choice. Many more than likely went to public schools of the 1990's where math was watered down. People make bad decisions because they want things now rather than waiting till they can afford them. The have great roll models in Washington D.C. that are masters at this.

Sep 16, 2007 12:15 PM
» Bill Burress Nationwide Mortgage Originator
» Bill Burress Nationwide Mortgage Originator - Fort Myers, FL


I must respectfully disagree with you regarding mortgage companies making the spread between 1-4 percent.  The banks didn't make that spread either.  I think you are getting some of your rates confused.

There were many mortgage companies that made a lot of money, but it was due to volume and a refinance boom as well.  Afterall, mortgage compannies are limited on how much they can make on a transaction.

Sep 16, 2007 12:48 PM
Amanda Evans
DFW Living - Fort Worth, TX
Real Estate Broker - Fort Worth Texas

This post was faster than a Fox News Alert! 

The timing seems a little weird to me that Alan Greenspan's interview airs 2 days before we expect to see a rate cut.  I know he has a book coming out but the timing is still curious to me.  What will Gentle Ben do? 

As far as the previous rate cuts going on so long was concerned, and I've posted this before, it was like the morning after a heavy night of drinking at a frat party.  Not quite sober yet, the inevitable pain is bound to set in but if you keep on drinking you can delay it just a little while longer.  Eventually, the bottle is empty and quite the hangover begins.

Finding where to place the blame seems useless, but the lawyers are circling the wagons.  The good news is that there are opportunistic buyers out there watching and waiting to get in on the action.  

Sep 16, 2007 01:08 PM
Frank Rubi
Frank Rubi Real Estate, LLC - Metairie, LA
John, I just hope that the market picks up one way or another. Many people are effect regardless who to blame.
Sep 18, 2007 01:43 AM

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