Now that the real estate bubble seems poised to go the way of its dot-com predecessor, a new narrative has taken hold in the business press. Where once reporters breathlessly touted double-digit, year-on-year gains in home prices, they now warn darkly of the “meltdown” underway in the class of exotic mortgages that added so much punch to the party. After… return to article
-
subscribe to print magazine
-
email this article to a friend
-
Reader Comments (2)Page 1 of 1 pagesA lot of people have been burned in this scam — the home purchaser (if he had a down payment), some of the resellers, the investors in mortgage companies and hedge funds — in short those directly connected.
The fallout will spread to those who will now have an even more difficult time qualifying for a loan due to the tightening of lending practices form those who “got religion” (until the next time).
A long time, very good friend had to be moved into a assisted living facility nearly two years ago. He had been unable to do home maintenance for about a decade and his kids sold the homestead to a rehab guy to get the funds needed to care for Dad.
About a year ago I stopped by and talked with the rehabber and tour the house — all new carpeting, a new kitchen and two baths, all windows replaced, trees trimmed — a total of $45,000 in replacement and repairs.
The home across the street was vacant and he was thinking of sending a bid to the bank.That home repossession should have (may have) been a warning to him. It is still vacant and no work in progress.
My friend’s house did not sell and has now been rented. Out of eight houses I regularly pass in our neighborhood, two have been for sale for more than a year, two have been taken off the market for a time and are now back on, two now have sold signs (well, sale pending).
This is a typical 40-year-old middle class neighborhood of homes in the 1700k to 2500k square foot range. There are several deteriorating, uninhabited houses which only get the grass mowed about once a month. No money down means they can walk away.
Perhaps the last ditch money source — credit cards — can carry this “(consumer driven) Goldilocks Economy” a while longer, but with the prices on energy and food (those often excluded CPI items) continuing to soar I wouldn’t count on it.
Only those who know when to fold ‘em made out on this.
First the dot.com fiasco and now this — They thank you, Maestro Greenspan.
Posted by whattheheck on Jul 17, 2007 at 6:50 AM CORRECTION: 1700 to 2500 sq ft (Bill Gates doesn’t live near here.)
Posted by whattheheck on Jul 17, 2007 at 8:01 AM Page 1 of 1 pages -
register a new account »Posting Security
Also by Dave Mulcahey
- Tranche Warfare
Who will be left holding the bag as subprime mortgages go bad? - Hooray for Hookergate!
- Passion of the Right
The uses of persecution - Another World, Possibly
- The Wise Many
- Design Flaw
Popular Discussions
- The 9/11 Faith Movement
Many Americans believe 9/11 was a conspiracy by the U.S. government
1968 posts since Jul 11 06 - What’s the 411 on 9/11?
891 posts since Dec 21 05 - Democrats: It’s the War
659 posts since Nov 1 05 - Was the Presidential Election Stolen?
459 posts since Jun 19 06 - A Fundamental History Lesson
The rise of National Socialism proved politics and religion don't mix
426 posts since Oct 10 05
© 2007 In These Times | Reprint Policy | Privacy Policy | Powered by Expression Engine | RSS Feeds
