The current crisis has many different faces. From the homeowner looking to secure the American Dream, The Realtor assisting in the home acquisition, the Mortgage Broker working with the client, and the Lender, it seemed like a win/win situation for all.
Then the bottom dropped out. Values crashed. Credit tightened and banks became less flexible. Everyday, more and more bad news came over the airwaves. Armageddon was upon us.
Then the finger pointing starts.
It was the sub prime lenders. This reason seemed plausible. After all, the market share serviced by subprime were usually urban dwellers. Of course they are the problem! Yes lets write a blog!!!
Then The "Good Loans" Fannie and Freddie backed are also defaulting. What now?
Blame the Republicans! Blame Clinton. Blame the Illuminati
Blame Somebody!!!
No...lets stop the blame game.
This is simply an adjustment. Overheating leads to over cooling. Plain and Simple.
Here in Florida the same 4/2 I looked at in 2000 for 259K went to 759K.
That is ridiculous.
Market corrections are never easy. I liken it to eating as much as you want for 4 years, getting fat, and then having to lose all the weight you gained within 1 year. Hard work and a lot of sweating.
Welcome to the gym of Reality.
Part 2 tomorrow.
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