Upside Down Mortgage

2008 Subprime Crisis

Question: Understanding the Subprime mortgage crisis?

http://genxfiles.com/2008/09/21/the-mess-that-were-in/

This blog did a great job of explaining the crisis, but how do we get back on track?

Answer: Everybody is looking for a quick fix. A fix which involves little or no pain. Such a fix doesn't exist no matter what McCain or Obama says. There will be pain. Lots of it. Anybody who says there's an easy way out of this is lying to you. Housing prices will plummet as loans continue to be unavailable and as foreclosures continue. More people will be thrown out of their homes. Banks will continue to fail. They will be stuck with homes they cannot sell at a price to cover the mortgage. Deflation may occur. Hell, it's happening now with the drop in oil, gas, homes, gold, metals, grains and other commodities. The economy will slow. Interest rates will drop further. Unemployment will rise. Eventually (a year or two from now) a bottom will be reached. Interest rates will be so low and housing will be so cheap, that people will be able to buy them. At least those with the best credit records. The economy will begin to pick up again. Jobs will be created again. But this will all take time and pain. The government needs to let it unwind. I fear they won't and will just delay a more natural recovery.

Inside the US subprime crisis 01 April 2008

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