Date registered: Oct 2005
Vehicle: 107, 115, 116, 123, 124, 126
Mentioned: 1 Post(s)
Quoted: 0 Post(s)
I think it's a bifurcated cluster fuck. You had the speculators in the sunbelt buying preconstruction spec homes on interest only mortgages hoping to get healthy on the appreciation and they got crushed. I say fuck the greedy bastards. I said they'd get crushed a year and a half ago when I heard one of my friends tell me his cable installer had three spec homes.
Then you had the really poor people in Cleveland and Detroit who had some fast talking lying bastard wave $50,000 in their faces if they signed on the dotted line. I say track down the predatory lenders and fine the hell out of them. If the home owners who occupied the dwelling can make the teaser rate payment but can't handle the reset, freeze the rate until the loan is restructured. If they can't even make the teaser rate payment they screwed themselves.
The institutional investors who invested in CDO's (collateralized debt obligations) took a risk. They're going to take a haircut. That's the nature of investing.
CDO's are like sausage...there some good stuff in there, there's some not so good stuff in there. You don't really know what you're getting, you were taking a risk.
The big boys, Citi et al are alreading taking their write downs.
The good news is that 94% of mortgages are performing right now. I know 6% is a lot, but if you can attack that 6% and break it down so that only 3% is written off, the effect on the economy will be minimal. The real effect, using your home as an ATM machine, has already stopped and we are now in the middle of that effect on consumer confidence and consumer spending.