Subprime loans’ big chill: Freeze hits buyers with good credit, Wall St.

Subprime loans’ big chill: Freeze hits buyers with good credit, Wall St.

By Jerry Kronenberg
Monday, August 13, 2007

Real estate broker Francis Adams has a condo sale set to close tomorrow , but fears the lender providing the buyer’s second mortgage might go out of business by then. “I’ve been in real estate for 12 or 14 years and I’ve never worried before about a bank not (completing) a transaction,” Adams said. “It’s scary.”

Experts say the subprime-mortgage meltdown is quickly spreading across the banking industry, drying up some types of loans, even for people with good credit.

“The era of cheap and available credit for everyone has ended,” said economist John Bitner of Boston-based Eastern Bank.

Some 50 subprime lenders have gone out of business since January as thousands of borrowers with weak credit defaulted on their mortgages. Even mortgage giants like Countrywide Financial - which doesn’t focus on subprime loans - have warned of potential problems.

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http://business.bostonherald.com/businessNews/view.bg?articleid=1016892&srvc=biz

Maybe lenders won't play so fast and loose for a long while, and people will wise up and do their homework when it comes to taking out a loan. As for me, I remain a happy renter by choice, but am keeping an eye on the market. The housing market would probably have to drop another 20% before I might consider buying. If it doesn't, I'll stay a happy renter (by choice).

The banks turning credit decisions over to untrained salesman chasing their commission is a huge factor in this freakshow. These salesmen were only to happy to lie and cheat to get the deal done.

With this glut of money people who couldn't pass a T-Mobile credit check were able to get massive mortgages with which they bid shitty houses into orbit. Not all the people were stupid, alot of them were scared that if they didn't buy in right away they may never get another chance. They knew they couldn't afford it.

Then you have the fucking speculators who not only made the above worse, but got themselves into shit after watching staged reality tv shows about house flipping. Amature real estate investors were some of my most frequent visitors when I worked on bankruptcies.

And like most economic issues in America - there are just alot of fucking stupid people here who are financially illiterate making decisions they don't understand - and naturally the mall kiosk cell phone salesmen mortgage brokers were all to happy to take advantage of that.