Monday, March 05, 2007

Mortgage Crisis Here

Mama was right. Who messes with Mama, anyway? The New York Times has more. Sub-prime loans are coming out of their ARMs and banks won't refinance them because they were bad loans to begin with. Can you say default crisis? And the little guy gets screwed. The mortgage guys made their money on the backs of the poor:

“You just lost touch with reality after a while because that’s just how people were living,” said Mr. Elsayed, 42, who spent nine years at New Century before leaving to start his own mortgage firm in 2005. “We made so much money you couldn’t believe it. And you didn’t have to do anything. You just had to show up.”
Now an escalating crisis in the market, which seemed to reach a new crescendo late last week, is threatening a wide band of people. Foremost are the poor and minority homeowners who used easy credit to buy houses that are turning out to be too expensive for them now that mortgage rates are going up, but the pain is also being felt widely throughout the business world.
As Mama said before, this is an abomination to take advantage of those with less.

I do believe this will drag down the economy some. We'll see. Is it time to get out of the stock market for a bit?

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