How much advertising is bought on TV, newspapers and the internet for mortgage schemes? Trouble in this sector is going to have a dramatic effect on advertising revenue for all media.
This signals that the current credit cycle is over and risk premiums are going back to normal levels.
Too bad the debt junkies have to go into withdrawl because the economy became dependent upon their free spending ways.
BUMP
The mortgage industry has a lot to answer for. For years they have been pushing products that encouraged people to buy houses they couldn’t afford and WaMu has been one of the biggest offenders. What with teaser rates, balloon payments, interest-only loans, negative amortization loans (loans that actually increase your debt despite your payments), WaMu and many others in the industry deliberately set up their customers so they would have to refinance their homes every five to ten years just so people could afford their increasing payments on houses they never should have bought in the first place. Frankly, it was a form of Ponzi scheme. It was bound to collapse and now the American economy is going to pay the price.
I chose 26 month Treasurys two weeks ago and wondered why the fellow I was dealing with was pushing the WAMU CD’s so hard.
B-B-B-B-B-B-B-BOOYAH FROM TEXAS!
What does that mean for people who have a mortgage with WaMu, I wonder?
Commercials are running out here saying, "Borrow $ 100,000 for payments of only $ 250 per month." That must be based on a low 'teaser' rate. Details are not being disclosed by the television ad. But I suspect there is a much higher rate fall back rate. Suckers will wake up in two years and discover they owe $ 128,000 with a balloon payment due.
Then they will face foreclosure within 90 days. With additional late charges, penalties and legal fees they will probably owe about $ 150,000.
These schemers are all the same. They want to SEAL HOUSES!