Staying Current With The Mortgage/Real Estate/Economic Crisis of 2007
Below are selected news headlines that will bring you up to speed on the mortgage industry and the effects it is having on the overall economy. Basically the mortgage industry is broken. Wall Street will not buy mortgage securities so lenders aren’t meeting the demand for loans. Only the most credit worthy are able to borrow on favorable terms.
This is causing three major problems. One is nationwide real estate values are plummeting at a historical rate. The second problem is that homeowner’s ability to borrow has been greatly diminished and could disappear all together. The third problem is that lenders are not able to securitize their mortgages.
If they can’t securitize they won’t lend. Also due to the massive depreciation in the values of their mortgage security holdings, the lenders themselves are in jeopardy of going out of business.
If the consumer cannot borrow, the consumer will not spend money to keep the economy growing. Consequently, there are more and more predictions for a recession in 2008. The effects of the mortgage and real estate crisis on the economy are just beginning to be felt. In fact we’re in the very early stages of this economic meltdown.
In any event, here are some articles to support these views.
Articles pertaining to the subprime situation
- Subprime Crisis Not Over, More Writeoffs to Come
- Freddie Mac’s subprime losses may hit $5 billion: CS
Effects On The Economy
- Mortgage crisis a drag on Atlanta economy
- Report: Sharpest drop in housing prices in index’s history
- Consumer confidence lowest in two years
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