Friday, October 24, 2008

Worldwide Market Sell Off - Can Lenders Sleep At Night?

Bruce's Observation

In my mind, I cannot imagine how it feels to be one of those lenders back in '04 - '06 that were pushing the no-doc "cheater" loans.

The lenders that had no scruples telling clients not to worry about the fine print, fudged estimations on their clients ability to re-fi, market predictions (Which they weren't qualified to make.), and other such deeds.

Pitch that loan then sell it to the big houses Mr. lender. Good job. Too good a job.

And where are the big houses now? Countrywide went down hard, Wachovia is there, Lehman's. It's befuddling to me. Now we have to have the goverment try to create some sort of stop gap to stop the gap. How are we going to hold that one up? More loans to protect more loans? When does that spiral start to swirl?

I look at the Business headlines from October 7th:
  • Market Confidence Plunges
  • Bailout Package Sparks a Worldwide sell-off
  • Bank of America Reports 68% Profit Drop
  • EBay To Trim 1,600 Jobs
  • Dow Dips Below 10,000
  • Rescue Plan Woes Contribute to Sell-Off
  • European Governments Go Their Own Way on Crisis
  • Fed to Provide As Much As $900 Billion In Loans to Banks
  • Oil Prices Fall as Financial Turmoil Heats up Worldwide
Worldwide. This is like a bad Sci-Fi movie, but sadly it isn't. I'm living in it right now. I saw the worldwide sell-off and thought, wow, lenders really did us in, didn't they? (Right Wil?)

I keep spouting that lenders are the cause. Technically, everyone is at fault. But the consumer who trusted the lenders became the victims. They trusted the lenders to tell them what was right for them because they didn't understand what they were reading. It seems, there were a lot of them.

But then, I remember when out-of-state "investors" were calling brokerages in Idaho and wanting to snatch up houses, sight-unseen, and agents going right along with them. Shame on all of you.

Did you, the real esnake agent, reflect on your buyer, your local economy? Did you point out that most folks in the region could not afford the rent the out-of-state investor was thinking of charging? Nope. That's why so many houses went empty in that last year that I was up in Idaho.

Hence how I failed in the real estate industry. There was no room for someone who was completely upfront with their customers.

Of course, Palin just says: Don't make those bad loans anymore everyone! Great answer. Why didn't we think of that sooner.

I just shake my head, wondering, when will it finally stop? When will the big financial collapse actually occur? How many will suffer?

You should all be ashamed of yourselves.

No comments:

Post a Comment

Hi - sorry for the confirmation but I need to weed out the noise from the well intended comments. Thanks for leaving a note... - Bruce